A working group of the National Revenue Agency is discussing which tax officials will be allowed to peek in people’s credit files and which individuals and companies will be “authorized for hunting down.” In the coming weeks, banking secrecy of citizens and businesses will cease to exist for tax collectors. In this way they will easily detect people who have income but do not pay taxes and health insurance premiums.
Employees of the National Revenue Agency (NRA) can track down the credit history of individuals and companies. What gives them such rights are the amendments to the NRA Act made in the autumn of last year. Technological monitoring of debtors defaulting to state is going through the Central Credit Register at the National Bank, where banks reflect movement on all loans to individuals and companies.
The idea to give tax authorities access to the accounts of citizens was launched several times in recent years. The most serious argument against granting access to the Central Credit Register was the maintaining of the banking secrecy.
In the middle of last year the businesses strongly expressed their concern that such a change could lead to leakage of commercial information, which will be in fact a violation of the banking secrecy. But according to the tax officials concerns come from the new option to access the credit register which translates to a quicklier detection of individuals and companies who hide income. Until this year, the tax had access to the credit register, but only in specific revisions and after court decision.
In the EU, similar processes are also running. Since the beginning of last year two European directives came into force that on the one hand will facilitate businesses and reduce administrative costs, and on the other, however, the provisions put in question the bank secrecy in the community. According to these directives, EU countries will cooperate more closely, and the tax revenue authorities will share information on various cases. In practice, in some cases this puts an end to banking secrecy as a tax office in a country can not refuse information requested by a financial institution. This data will be shared in cases where there is suspicion of tax evasion.
From the first day after a long holiday in early May, the Bulgarian tax authorities began with calls and warnings to those who have not paid the tax or submitted wrongly filled in tax return. The second step is a formal subpoena. Then, there are seven days for the obligations to be repaid. The final measure is the law enforcement, which most commonly is to seize the wage of debtors. For small technical errors in the declarations a fine will be charged.
As of 7 May penal interest is also calculated on the taxes payable for last year. This occurs if even if one has paid the tribute at the last moment by a bank transfer and the real transactions is reported with delay because of the many holidays in early May. The penal interest rate to be charged is a little less than 10%.
“We will make a small gesture to the regular taxpayers who because of the long holidays were prevented to pay on time and we will not impose a penal interest up until the middle of the month, but then we will have to,” a tax official told the BANKER.
The BANKER
