VAT Fraud Drains Bulgaria of BGN 700 M Per Year - Expert

Crime | January 3, 2012, Tuesday // 17:26|  views

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VAT fraud drains an average BGN 700 M from the state budget per year through schemes involving around 30 000 companies out of a total of 250 000 VAT-registered firms.

The data was presented on Tuesday by Hristo Yordanov, head of the Financial-Credit System unit at the Economic Police Department of the Criminal Police Chief Directorate of the Interior Ministry, as cited by 24 Hours daily.

The most popular scheme involves registering companies for VAT on behalf of poor or illiterate people or representatives of the minorities who then authorize other persons to carry out the fraudulent business operations.

VAT fraud schemes tend to get increasingly complex through the introduction of more and more intermediate levels through the so-called missing-trader companies and buffer companies.

The fraudsters mix real and dummy operations amid a superior organization of many persons and commercial entities, including ones registered in offshore zones.

In Yordanov's words, such crimes are invariably assisted by economists, legal experts and bank officials, whose professional qualifications and social status obstruct the investigation of the tax evasion schemes.

VAT fraud is most common in trade in crops, sugar, scrap metal, services, meat and dairy products and building materials.

According to the National Revenue Agency (NRA), the gravest instances of VAT crime are committed by companies specialized in crops and fuel trade or ones operating in the construction and services sectors.

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Tags: VAT fraud, tax evasion, National Revenue Agency, NRA, Criminal Police, interior ministry, economic police


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