Bulgaria's State Budget Deprived of BGN 200 M a year through Bootleg Rakia

Business | October 4, 2013, Friday // 15:04|  views

A total of 50 million liters of rakia are produced illegally in Bulgaria on an annual basis, according to data of the National Vine and Wine Chamber.

In an interview for Monitor daily, Plamen Mollov, Chair of the National Vine and Wine Chamber, reminds that no excise duty is paid on the huge quantities of bootleg rakia.

He says that the country's legal production of rakia amounts to 30-35 million liters a year, while the annual quantity of bootleg rakia is 20 000 liters more.

"Bulgaria has 70 000 hectares of vineyards, which generate a yield of around 350 000 tonnes a year. Out of the total, around 200 000 tonnes are processed into legally produced alcohol," Mollov says.

"These figures have remained almost unchanged for the past 10-15 years. As a result, some 150-170 000 tonnes of grapes are processed illegally," he specifies.

He explains that, besides excise duty, the state budget also suffers losses due to unpaid VAT and other taxes.

Mollov notes that rakia with 40% alcohol content is levied with excise duty of BGN 4.40 per liter and suggests that the state budget is deprived of over BGN 200 M.

According to data of the National Statistical Institute (NSI), alcohol consumption went up by 8% year-on-year in 2012. Meanwhile, the increase in excise duty receipts amounted to a mere 0.8%, meaning that the consumption of illegally produced alcohol went up.

Home-produced rakia is made in cauldrons with a capacity of over 500 liters, which means that industrial volumes of alcohol are produced, which should be levied with excise duty and other taxes and subject to the same rules and accountability standards as corporate producers.

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Tags: illegal production, alcohol, excise duty, VAT, National Vine and Wine Chamber, Plamen Mollov


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