The Bulgarian State will Pay You if You Report Someone for Hidden Taxes

The quadruple ruling coalition is planning a controversial incentive to increase tax and social security collection. The government proposes that from 2023 a bonus be introduced for every citizen and company that has helped the tax authorities with information to establish hidden taxes and social security contributions. The bonus will be 10% of the additional income entered into the treasury thanks to the signal.

To make this happen, the government will amend the Tax and Social Security Procedure Code, which regulates the procedure for establishing tax liabilities. According to experts, the measure is very controversial and could lead to legal chaos, harassment and blocking of the tax administration

The proposal for payment of 10% of the additional revenues established on the signals of citizens and companies is written in the package of anti-crisis measures. The details of the implementation of such an incentive are still unclear, and can only be expected in the autumn with the introduction of the regular package of tax laws with the preparation of the 2023 budget. However, according to experts, the measure is extremely problematic and could block the work of the administration, lead to false signals and incite citizens and companies.

At the moment, the tax authorities accept signals for tax and social security violations, if they are submitted in compliance with the rules of the Administrative Procedure Code. The Code allows proceedings to be instituted only if the alert is not anonymous and concerns violations committed in the last two years. The establishment of additional obligations itself takes place after an audit, which is assigned by an explicit order, and the audit act, in case obligations are established, must enter into force....