Банкеръ Weekly

Briefs

DUTY-FREE TRADE BRINGS EUR131.5MN IN 2003

Revenues from duty-free trade in Bulgaria reached EUR131.5MN in 2003, the BANKER weekly learned. The bulk (EUR81.5MN) are revenues from the sale of alcohol, cigarettes, and perfumery. The other EUR50MN came from the oil stations owned by the well-known Turkish businessman Fuat Gyuven. The ten commercial companies, united in the Association of Duty-Free Traders and controlling about 80% of the duty-free alcohol and cigarettes market, registered a turnover amounting to EUR64MN. Some EUR17MN are reported as revenues from sales at state-owned duty-free shops at the country's airports.Companies from the branch have paid EUR2.135MN to the accounts of the Customs Agency as taxes due in 2003. Another USD20,000 must be added to this amount for the trade in excise duty products.Transimpex AD was the sales leader last year (EUR19.5MN). The company is licensed to manage 15 shops. Second comes B.N.K. owned by Vesselin Balevski, former premier's adviser in the cabinet of Ivan Kostov. His company reported revenues worth EUR9.7MN. It is followed by Corecom Princess AD which is majorly controlled by companies of the Turkish entrepreneur Sudi Ozkan. Corecom has sold products worth EUR8.4MN. Other two companies - Deneb and Sofcom, have registered similar amounts of turnover - EUR8.3MN and EUR8.2MN respectively.According to the Chairman of the Association of Duty-Free Traders, Radostin Genov, these figures justify the need of keeping the duty-free business alive until Bulgaria joins the European Union. Late in 2003, the Minister of Finance Milen Velchev extended the expiring licences of the duty-free operators until 2007.The Finance Ministry and the traders are now negotiating for the improvement of the operating tax and customs legislation, Mr. Genov said. One proposal upon which an agreement has already been reached with the Chief Tax Directorate is to amend the Value-Added Tax Act. Should the amendments be adopted by the Parliament, no VAT will be paid for delivery of cigarettes from the distributor's warehouse to the duty-free traders.As it is known, the main importers of duty-free brand cigarettes in Bulgaria are B.N.K., Duty-Free EOOD, and BRV, which trade in products made by Philip Morris, as well as Seacom - distributor of British American Tobacco.The new copy of the Law on VAT will probably contain a special unit that regulates duty-free transactions. It will make it clear that this category includes sales in shops of duty-free operators as well as sales in diplomatic shops.

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