Bulgaria’s chief prosecutor Sotir Tsatsarov has ordered tax authorities to inspect all Bulgarian citizens who have bought properties and cars for over €260,000 in the last two years.
The actions of the Sofia authorities are surprising, given the increasing collection of tax revenues and the boasts of Prime Minister Boyko Borissov about his achievements in the fight against smuggling.
In 2015 and 2016 a total of 365 Bulgarians bought properties worth more than €260,000, 120 of which cost more than €410,000. These are significant sums for the Bulgarian property market, where a two-bedroom apartment in the capital costs between €70,000 and €100,000.
Police data shows that hundreds of luxury cars have been registered in the EU’s poorest country, including 50 Mercedes-Maybachs, 193 Bentleys, 31 Lamborghinis, 68 Rolls-Royce and 93 Ferraris.
The Prosecutor’s Office announced that for some of the luxury property and car owners it has “evidence of possible crimes, including tax frauds and imposture.”
This is not the first such action by the Sofia authorities. In 2005 the prosecutor’s office proposed legalising illegal capital, but the main political parties rejected this proposal. The context was that Bulgaria needed a positive image before Brussels in order to be accepted as a full member of the EU in 2007. At that time, tax evasion was not a crime under Bulgarian law. In the following years, tax evasion was criminalised and a new law passed a law on confiscating unexplained wealth.
In 2010, tax officials used helicopters to take photos of the huge mansions of the wealthy built in the southern regions of Sofia. That resulted in an additional €7 million being collected.
The National Revenue Agency said it checks the income of some 2,000 people each year, a process which results in an additional €50 million in tax revenues.
There is no explanation as to why the authorities in Sofia are looking for unexplained wealth only through property or car ownership, and not for those who have acquired shares in companies. DPS deputy and media tycoon Delyan Peevski will not be among the officials inspected, although he has become a multi-millionaire in the past three years.
In his public statement in 2014, Peevski wrote that he had saved €8,000 from his salary. In May 2017, he declared shares in various foreign and Bulgarian companies worth €33 million and bank deposits for another €8 million.
However, he does not own property for over €250,000 or an expensive car, only a 19-year Opel worth €500.
Last year, tax authorities checked Peevski and said that he had no case to answer. However, details have not been disclosed.