|
Robert Mirchev, Mario Traikov
The role of tax police in the process of Bulgaria's European Integration
Robert Mirchev was born in Sofia and graduated in Accounting and Control from the University of World and National Economy. He has worked in the system of the Finance Ministry since 1988 taking consecutive posts of tax inspector and head of the Excise Duties service. He is currently employed at the State Receivables Collection Agency.
Mario Traikov was born in 1960. He is a university graduate and has specialised in Italy. He headed a trade office in Italy. Traikov is currently a shareholder in a construction and food and wine industry company.
A National Agency of Fiscal Investigation is soon to be established in Bulgaria, as a compromise reached by the Finance Ministry, the Interior Ministry and the prosecution. It will not be called tax police but a national agency because of the fact that many ministers in previous governments and MPs fear the name Tax Police.
In 1996 the government of Zhan Videnov established the service for the prevention and exposing tax fraud. The service worked and created quite a number of problems for the grey and partially for legal business attempting to evade taxes. In order to allay certain circles somewhat, it was closed down by Finance Minister, Muravei Radev with the passage of the Taxation Procedure Code and its enforcement in the beginning of 2000.
I would not like to go into analysis of the operation of the Service for Tax Fraud Prevention and Exposure, I will dwell on its functioning and the reasons for its closure. Time, however, showed that such a structure should be consolidated, cleaned of incompetent and undisciplined employees for whom there were doubts of corruption, which is only confirmed by the idea of Finance Minister Milen Velchev to establish a new agency for fiscal investigation similar to the existing one. The new agency would help prevent the annual losses of nearly half a billion leva sustained from the state as a result of tax fraud.
Because of lesser control on the import and subsequent sale of imported cigarettes, timely measures were undertaken with the introduction of new excise revenue stamps for the cigarettes sold in the country and those sold in duty free shops. Even these measures, however, did not prove to be good for imported cigarettes without excise revenue stamps, meaning unpaid excise duty and VAT, are still being confiscated.
How can work be improved with the structuring of the new agency?
First, consensus between the various institutions.
Second, coordination of plans and joint operations between them.
Third, exchange of information, both tax and police, in the cases of tax investigation.
What role would the National Fiscal Investigation Agency have to play in Bulgaria's European integration?
The answer to this question lies in analysis of the operation of similar services in the European Union member-states, their structure and legislative provision. One example of an established and functioning service is the Italian tax police, which is headed by a brigadier general but is subordinate to the Finance Minister. There are tax police authorities in Germany, the Netherlands, Sweden, Greece, Romania and other countries. The service in Sweden enjoys extensive rights. I can request company bankruptcy from the court or the blocking of all assets. In the Netherlands, the Finance Minister does not have the right to intervene directly in the investigation of tax frauds. The law is adamant in its penal provisions - six years imprisonment and a fine equal to 100 per cent of the evaded taxes.
The authorities with the European Commission on the application of law in the field of taxes include the Directorate General for Taxation and the Customs Union. The European Anti-Fraud Office (OLAF) was established and operates in the European Union. The new agency maybe will have a similar structure in Bulgaria. There are currently several units in the system of the Interior Ministry operating against economic and financial crimes. These are the Economy Police, Large Tax Fraud Section at the national police service; the Contraband, Banks and Finances Economy Section at the National Service for Combating Organised Crime and the economic sections at the respective regional divisions of the Interior Ministry.
In the last couple of years, in the course of checks of excise goods and the chains of companies for VAT siphoning, the Finance Ministry and the Interior Ministry signed two instructions aiming to coordinate the actions of the tax authorities and the police with special authority in this field. The two ministries also drafted internal ordinances regarding the organisation of joint action. Currently, tax officers are accompanied by officers of the National Service for Combating Organised Crime and the Economy Police in the case of hazardous checks.
In order to close the Taxation Chapter of pre-accession negotiations with the European Union we have to make amendments to tax legislation that would align it in terms of VAT, excise and direct taxes.
The authority of the bodies for establishing property acquired through criminal activity has been selected well in proposed bill for confiscating such property in favour of the state.
The task of the National Fiscal Investigation Agency in Bulgaria will be to counteract tax fraud involving natural and juristic persons, and people with specific social status. Months of work go into one case before the perpetrators of tax fraud are discovered. This agency should work in complete harmony with all structures of the Finance Ministry and should have the full support of the economic units at the Interior Ministry, the prosecution and the court.
To achieve good results it is important to have coordination between all institutions and to adopt an unprecedented and unconditional law regarding the agency, which will require the individual employees at the individual institutions to provide information and cooperate with the agency by economic and penal sanctions. It is my opinion that, without these extreme measures, a good effect in the operation of the National Fiscal Investigation Agency will not be achieved, nor punishment of the respective tax frauds. The loyalty of a tax policeman, the transparency in his work is of particular importance.
In terms of information, an automated information system for tracking down tax fraud, invalid invoices, phantom companies, drafted and issued certificates, penal provisions, tax audit reports on the individual laws and natural and juristic persons who have perpetrated tax violations in the past five years, will be necessary for the needs of the agency. This could serve as a database in which such information will be amassed and analysed. The system should have an option to adapt to the information systems of the Interior Ministry, the Customs Agency and those of the European Union.
Interaction between the National Fiscal Investigation Agency with other authorities and within the tax system shall find expression in the sphere of audits, increasing collectibility of overdue taxes, as well as direct operative control and stimulation of high professionalism. The agency will work on terminating grey economy attempts to legalise its produce, measures related to effecting control on the activity involving excise goods, control the activity of persons liable to final annual taxation, control of seasonal commercial entities at resort complexes and nucleated settlements with a view of preventing undeclared activity and tax evasion.
The tax police should be furnished with a department for analysis and forecasts in the development of tax frauds and violations with the aim of their prevention in cooperation with the Interior Ministry, the Customs Agency, the Financial Intelligence Bureau Agency, the State Financial and Tax Control Agency, the State Commission on Gambling, the National Social Insurance Institute, the State Receivables Agency and other authorities.
The Government Tax Policy chapter for the 2003-2005 period provides that the objective is to reduce bureaucracy in tax administration and establish a tax police with the necessary authority. The establishment of a national agency for fiscal investigation is considered from the aspect of our future membership in the European Union after 2007 and would have a positive role to play in consolidating and developing tax discipline in Bulgaria and abidance by the taxation legislation on the part of all taxpayers.
|
|
