ECONOMY

Smuggling has cost Bulgaria 30 bln euros over past decade

SOFIA – Smuggling, aided by customs officials who are protected at high political levels, has cost poverty-stricken Bulgaria up to 30 billion euros in tax earnings over the past decade, according to a new report published in Sofia. «In total, over the last 11 years, the state budget has lost out on some 20 to 30 billion euros» it should have received in taxes, said report author Tihomir Bezlov, of the Center for Studies of Democracy, a Sofia-based independent think tank. The European statistical institute Eurostat, which counts all articles exported from the European Union to Bulgaria, estimates the country’s annual imports 400-500 million euros higher than Bulgarian customs officers do, as many imported articles are not registered. Eurostat’s estimate for Bulgaria’s annual exports is 300-500 million euros lower than that of Bulgarian customs officers, because firms declare exports in order to claim back value-added tax, but these items never cross the border. «That is the approximate cost of smuggling,» said Bezlov. Criminal organizations control smuggling «in league with customs officers, who work at national level and are protected by politicians,» said customs inspector Thavdar Kanev. «In the process of illegal importation. .. there is necessarily a politician or a person with political influence who ensures the other participants’ comfort and is the final destination and distributor of bribes,» the report explained. Corrupt customs and police officers aid smugglers by advising them on how best to forge documents or by giving them customs equipment. «Bribes for this sort of advice cost up to 30 percent of the taxes ‘saved’ by the importer. They particularly help weapons and drugs trafficking,» said Kanev. Around 70 percent of cigarettes and 35 percent of oil products are smuggled into the country, according to the report. In northern Bulgaria, petrol is sold directly from tanker lorries which have entered the country illegally from Romania by paying bribes of up to 7,500 euros per vehicle, it said. In the second-hand car market, smugglers fraudulently benefit from reduced import taxes for invalids when they bring some 15,000 luxury cars per year into the country – more than 15 percent of used cars imported each year. Discreet passage for stolen cars «costs» around 1,500 euros a vehicle, the report said. Electronic equipment for the home, computer parts, alcohol, textiles from Turkey, China and Dubai, vegetables from FYROM, Turkey and Greece, and meat from the United States and western Europe are also regularly smuggled into Bulgaria, the report said. «This ‘gray economy’ creates serious difficulties for hundreds of Bulgarian businesses in these sectors which pay taxes,» the report said. Some even go bankrupt – notably in the shoes, glass and hardware sectors. «Smuggling worsens poverty and stops the market economy from working,» the report said. In September, Bulgaria’s foreign trade deficit widened to 210 million euros, 66 percent up from September 2001, according to the most recent figures from Bulgaria’s statistics institute. In total, the foreign trade deficit this year reached 1.4 billion euros.