Bulgarian Duty-Free Operators Push for Licenses Anew

Business | January 30, 2012, Monday // 17:48|  views

An independent MP has put forth a draft bill paving the way for the restoration of duty-free trade. Photo by Sofia Photo Agency

Independent MP Emil Vasilev has proposed legal amendments providing for a resumption of duty-free trade and for a restoration of the suspended permits of duty-free trade operators for indefinite periods.

The proposal of Vasilev, a former MP of the marginal conservative Order, Law and Justice (RZS) party, started circulating a week ago, but economists from center-right ruling party GERB said that the issue was not on the agenda.

GERB MPs did not say whether they would back or oppose such a motion but used the opportunity to point out that duty-free trade operators had long been making futile attempts to push through legislation allowing the resumption of their activity.

Upon learning of the proposed amendments, some GERB MPs immediately dismissed the idea as impossible, saying that a resumption of duty-free trade plus preferential treatment for the operators was simply "overdoing it".

Menda Stoyanova, Chair of the Parliamentary Budget and Finance Committee, echoed the widespread disapproval of the initiative.

Representatives of the ruling party reminded that the main reason behind the suspension of duty-free trade had been their functioning as smuggling hotspots.

During the debates on the matter, tax officials said that checks at such stores had yielded cash register paper rolls registering numerous sales done within an hour.

This led economic experts at GERB to conclude that if this type of trade were to be re-introduced, the process ought to be accompanies by solid guarantees against fraud.

The draft bill put forth by Emil Vasilev provides for no such guarantees but stipulates preferential treatment for the duty-free trade operators who had their licenses suspended.

Under the provisions proposed by Vasilev, duty-free trade operators (commercial sites and filling stations) which legally functioned as such prior to the ban imposed on July 01, 2008, will be able to apply for a renewal of their permits within one month after the entry into force of the said amendments.

The Finance Minister will then have one month to review the applications and to issue permits for duty-free trade for an indefinite period.

Under Vasilev's proposal. traders who were allowed to restructure their business or move the duty-free trade sites should also be granted permits for an indefinite period.

The independent MP suggests that license revocation should only be possible after January 01, 2017 at the demand of the European Union.

Under the draft bill, duty-free trade operators will pay corporate tax and an extra tax on duty-free trade amounting to 3% of the turnover.

Bulgaria closed all duty-free shops and filling stations along its borders with Macedonia, Serbia and Turkey in July 2008 in response to criticism from the EU that they were a major source of corruption and smuggling.

The duty-free outlets on Bulgaria's borders with Romania and Greece were closed back in 2007.

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Tags: duty-free, Emil Vasilev, RZS, order, Law and Justice party (RZS), European Comission, smuggling, corruption, filling stations, GERB, ruling party, Menda Stoyanova, parliamentary budget committee


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