Bulgaria lost more than 10 billion leva in less than five years because of the grey economy, a report to Parliament from the Supreme Cassation Prosecution office said on October 1 2008.
Tax evasion on its own cost an estimated 6.9 billion leva while about four billion leva was lost because of unpaid social insurance contributions.
Undocumented transactions by companies accounted for 39 per cent of the country’s gross domestic product (GDP), according to the report.
In an interview with Bulgarian-language mass-circulation daily Trud, Petar Raimundov, head of the information and analysis department of the Supreme Cassation Prosecution Office, said that the fact that businesses were failing to accurately state their earnings and the salaries paid to their employees meant that the countries was losing enormous sums “which could help improve the public health and education systems”.
At a conference on October 1, held by Parliament’s committee on the budget to come up with ways to legislate against the grey economy, Finance Minister Plamen Oresharski said that reductions in tax rates in recent years and the good work of tax and customs authorities had reduced the scale of the grey economy in Bulgaria, mediapool.bg reported.
National Revenue Agency director Maria Mourgina and Customs Agency director Hristo Koulishev also claimed successes against the grey economy.
Unofficial estimates by NGOs put the share of the grey economy as anywhere from 16 to 30 per cent of GDP, which taking the larger figure could mean it is “worth” an estimated 40 billion leva. NGOs told the hearings that the grey economy was one of the main obstacles to investment and growth in Bulgaria.
Prosecutor-General Boris Velchev was quoted by mediapool as saying that part of the problem of combating the grey economy was the confused system of controls, which more than 30 different authorities involved.
The conference was told that sectors such as construction and real estate declared to the country less than 50 per cent of the real value of their transactions.
