Bulgaria’s National Revenue Agency (NRA) has joined forces with the State Agency for National Security (SANS) in what appears an increasing assault on undeclared income and other forms of tax evasion.

Over the past week, Bulgarian media reported that about 400 companies and at least 150 individuals were being investigated. The latter number was expected to rise further.
NRA director Krasimir Stefanov said in an interview with Bulgarian National Radio on May 3 that his agency suspected 400 companies of a combined tax evasion of more than 100 million leva.

Only two days later, Bulgarian daily Standard reported that the NRA and SANS were investigating 150 individuals who each owned property worth more than 500 000 leva on the outskirts of Sofia, but whose tax declarations did not show income to justify such wealth. According to Standart, SANS had started a special investigative operation named Tycoon, in which it had investigated the lifestyle of the individuals concerned. As part of the investigation, SANS had found 112 Bentley cars, whose owners had filed tax declarations that raised questions.

The daily quoted remarks from unnamed special agents as saying that for a small country like Bulgaria, the number of luxury cars was extraordinarily large.

In coming months, the agency was expected to shift its attention to owners of expensive real estate in the centre of Sofia, the daily said.

The recent measures followed similar investigations announced in April, when the NRA and SANS targeted the owners of more than 230 luxury yachts and tightened control on borrowers and lenders. According to the NRA, accumulated debts added up to 2.7 billion leva, a "substantial portion" of which qualified as "actually fictitious".

According to an analysis published earlier by the NRA, in 2006 and 2007, loans worth 74 million leva went undeclared, of which 39 million leva was attributed solely to property lenders from Sofia.

In his interview with BNR, Stefanov said the NRA was "not at war with rich people". Instead, the agency targeted people who demonstrated a standard of living that was not in line with their tax declarations.

For 2008, 40 Bulgarians filed an income of more than one million leva. One Bulgarian declared income of more than 10 million leva.

According to figures published by the Finance Ministry, in the first three months of 2009, tax revenue collected was 20.3 per cent of the full-year target, compared to 25.2 per cent for the same period of 2008. In real terms, revenue collected in the first quarter of 2009 was down by 360 million leva, compared to the same period the year before.