By the end of May, the National Revenue Agency (NRA) fulfilled 36.4 per cent of its annual revenue target for 2010, NRA Executive Director Krassimir Stefanov told a seminar for journalists.

The economic crisis has affected public revenues collected by the NRA, he said. The most considerable delays have occurred in the collection of corporate income tax and value added tax. According to Stefanov, this is normal, because corporate income tax is a direct reflection of business activity, which was already affected last year by the economic crisis.

"The NRA can begin to collect forcibly every lev owed by its debtors, but it may thus cause companies to go bankrupt, which is not the purpose of the Agency and the Finance Ministry," Stefanov said.

The NRA has focused its efforts on combating tax abuse, he said. Over the last six months, it has prevented national budget abuse to the amount of over 500 million leva.

Over the last year, the NRA has conducted many audits of personal incomes, including 1,900 audits of situations where the value of assets owned by individuals did not correspond to their officially declared incomes. These audits have resulted in 60 million leva in additional revenues to the Exchequer.

Trifon Pavkov, Director for Policy Analysis at the NRA, said that between January and May 2010 the NRA collected 4,756,700,000 leva in total revenues, 17.3 per cent less than a year earlier. Central government budget revenues decreased 24.1 per cent.

By the end of May, the NRA fulfilled 36.4 per cent of its overall annual revenue target for 2010 and 34.5 per cent of its annual central government revenue target. The January-May target of overall revenues was fulfilled 84.5 per cent, and the central government revenue target for the five-month period was fulfilled 78.7 per cent, Pavkov said.

Throughout 2010, the NRA expects to collect 11,653,700,000 leva in total revenues, 10.9 per cent less than originally projected and 13.1 per cent less than collected in 2009. Revenues from value added tax, corporate income tax and personal income tax are expected to be less than originally projected for the year. Revenues from state dividends are expected to be double the originally projected amount.

Annual value added tax revenues will be 1,000 million leva less than the target, corporate income tax revenues will be 294.5 million leva less, and personal income tax revenues will be 254.4 million leva less.

Pavkov attributed the shortage of value added tax revenues to accelerated recovery of input tax for past periods, which amounts to 466.5 million leva so far this year. The current level of unrecovered input tax is the lowest in three years, he said.

The NRA has prepared a bill to set a 5,000 leva ceiling on cash payments, Stefanov said. "Currently, we are witnessing cash payments to the amount of millions of leva," he noted. The bill is likely to be submitted to Parliament after an expected update of the national budget. "We expect this measure to bring over 90 per cent of the turnover [in the shadow economy] into the light," he said. The planned connection of traders' cash registers to the NRA system through the Internet will contribute to this, he added.

The NRA has also submitted to the Finance Ministry a proposal to amend the Tax and Social Security Procedure Code to the effect that managers of companies implicated in tax crimes will not be allowed to register other companies.

Source: BTA