As of November 20, Bulgaria’s celebrities now have a new criteria to gauge their popularity and public status. The National Revenue Agency (NRA) has announced it will probe the incomes of 16 of Bulgaria’s top entertainers, including some of the country’s most famous folk, pop and rock artists. These checks were designed to root out possible tax evasion, the NRA said. The operation follows a tip-off to authorities that some artists were hiding a substantial portion of their income.

NRA top official Galya Dimitrova told private national bTV on December 1 that the NRA had received a number of anonymous tip-offs, the implication being that they might have come from competitors. The NRA said it welcomed tip-offs and said anyone with information about stars’ fees, or the number of concerts in which they perform, should contact the nearest NRA office. All dealings would be handled in the strictest confidence, the NRA said.

NRA investigations had revealed there was a high risk of artists evading tax because their fees were often paid in cash. The 16 prominent artists in question will have their tax returns over the past five years examined, Dimitrova said. Income, assets, real estate and luxury cars belonging to the singers and their families will be scrutinised to determine their actual value and origin. NRA officers will then determine if there is a discrepancy between the singers’ declared income and their actual assets. Should irregularities be revealed, the stars could face having the value of their property and luxury items revised. They may then be fined and re-taxed according to the true value of their assets.

Significantly, if it was revealed that tax evasion had been conducted at particularly "gross levels", they could face up to eight years’ imprisonment.

Once the NRA announced the probes, the media focused on those being scrutinised. The NRA seemed to fuel speculation by saying that three of the stars concerned had not even filed income tax declarations in 2009. One folk singer had declared 86 000 leva income for 2008 while her fee, according to media reports, was 6500 leva for each performance. Another check revealed that one particular icon of Bulgarian pop had not declared any income for the past five years.

Performers in Bulgaria receive a large part of their income from live performances at corporate and private parties as well as gigs in nightclubs. In particular, some folk singers perform several concerts a week. Their fees can amount to several thousand leva a night.

Some money naturally goes to the stars’ producers but the opulent lifestyle many stars enjoy – driving luxury vehicles, holidaying in top international resorts and frequenting Italian and French boutiques – suggests that they earn extremely well. NRA’s investigations to date reveal that most of the celebrities in question justified their extravagant lifestyle by citing loans from friends. This was the explanation offered by the owners of 100 Bentleys when they were investigated by the NRA several months ago. This hinders the work of the NRA because it has to check every individual "friend" and his or her income. To rectify this, the NRA is pushing Parliament to adopt a legislative change from next year whereby loans from friends and relatives exceeding 10 000 leva must be reported to tax authorities.