Bulgaria's Finance Ministry to Present Tax Fraud Prevention Strategy

Bulgaria's Finance Ministry is drafting a tax fraud prevention strategy in cooperation with other control authorities.

Speaking Thursday at a forum on counteracting tax fraud organized by the Bulgarian Academy of Sciences (BAS), Bulgarian Deputy Finance Minister Lyudmila Petkova said that the authorities had to identify the most efficient measures for counteracting illegal practices.

She explained that the measures would be developed in line with the different types of taxes and taxable persons.

Petkova, as cited by investor.bg, made clear that VAT fraud and smuggling of excise goods, including cigarettes, were the main reasons for the losses incurred by the state budget.

Bulgaria's Deputy Finance Minister drew attention to the fact that tax fraud mechanisms differed depending on the different categories of taxable persons.

She also noted that fraud schemes were also implemented with local taxes and fees.

To illustrate her point, Petkova said that an inspection of the database of the Sofia traffic police department (KAT) and the Sofia Municipality had shown that some 40% of the vehicles registered with KAT had gone untaxed and that there were also a number of undeclared buildings at the Sofia Municipality.

Petkova emphasized that the tax fraud prevention strategy would encompass state and local taxes and fees.

She reminded that a reverse VAT charging mechanism on grain and cereals and industrial crops had been introduced recently to prevent fraud.

Bulgaria's Deputy Finance Minister explained that the reverse VAT charging mechanism was a very efficient instrument but EU law did not allow for it to be applied for a wider range of goods.

She said that...