Банкеръ Weekly


Tax Hikes for In-house Diesel Stations

Several thousand filling stations used by farmers and corporations - somewhere in the fields or in remote closed facilities of transport and construction companies - drain from the budget about 100 million levs annually. “Based on this information, prepared by experts, we began our checks and imposition of conventional control regime and taxation in the first days of this year,” the National Revenue Agency (NRA) told the Banker weekly.

There is another aspect of the problem. Tax authorities’ audits show that the diesel there is often kept in containers that do not meet requirements - for example, large plastic containers from other preparations or scrapped tanks without certificates from the fire brigades nor from the environmental inspectorate.

"The problem is huge – for part of the sites we only suspect where they may be located. If we manage to find them, we give them instructions to implement. This will happen by the first days of February. By March, the owners of "home" filling stations will have time to fulfill the orders under the threat of closure in March," said Rossen Bachvarov, a spokesman for the NRA.

Prime Minister Boyko Borissov mentioned days ago: "These are 1,200 stations that have no accountability. To put measuring devices in each of them they need about 5000 levs in investment per site, while farmers get in subsidies 1.1 billion levs," defends the strictness of the government's intentions Mr. Borissov. Lyudmila Petkova, director of tax policy at the Ministry of Finance (MF), argued that for nearly a third of the fuel sold in the country no excise duty is paid. She mentioned that these stations remained outside the scope of the NRA in the introduction of online links with it in 2009 precisely on the ground not burden financially businesses. However, the budget loses in a big scale, since about 30 percent of fuel excise duties have not been paid and the state cannot track who has managed to do so. The sum in question comes to at least 30 million levs.

The new tax schedule showed understanding. They extended the previous period – that was up to the first of January this year for such sites to introduce convenient for control facilities.

Opposition from farmers and transport companies focused on the fact that changes in the law were made without public discussion. MPs deserve criticism for the two days, which they left before imposing the requirements. The changes were published on December 24 last year and entered into force on the first of January this year. The concerned parties were not left even physical time to react.
National Grain Producers Association sent a letter to Prime Minister Boyko Borissov demanding the immediate withdrawal of the controversial texts in the VAT Act. Letters to the Minister of Finance and the head of the NRA were sent by the Union of International Carriers and the National Association of Bulgarian Carriers. Representatives of the fuel sector voiced concern that the changes were made to benefit the big companies in the sector, who have chains wholesale trade. If a number of departmental stations that currently buy wholesale get closed, it will force their previous customers to start buying from retail chains, where the price of fuel is by about 20-30 cents higher per litre. According to representatives of the businesses this is a case for a profit of about 200-300 million levs per year, which can be generated by large chains.

According to many experts, the implementation of the provisions of the tax authorities for the filling stations in the fields will not be possible. This will lead to the closure of most of these objects and so the problem will be solved.

According to estimates of the owners of stations, installation of level gauges cost per each site about 20,000 levs and there is a need for another 1,300 levs per year for maintenance. "The installation of such devices is a form of just another unnecessary financial and administrative burden, and much of the farmers cannot afford these extra costs," says the open letter of grain producers.
Opponents of this thesis called it "ridiculous crying" because it all too well known that large grain producers (in this sector consolidation is greatest) are one of the fastest to have gone from new businessmen to new millionaires.
On the other hand the project is a gesture to small and medium businesses that use the facilities for their own purposes only. The strict requirements do not apply for liquid fuels from storage vessels with a total capacity of up to 500 litres, and the total amount of fuel filled for a calendar year should not exceed 2000 litres. In this case they are not required to install level measuring systems. Taxpayer will submit data only for the quantities of fuels received.


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