The Government has signalled its desire to ease business dealings in Bulgaria by approving a Programme for better regulation 2008/10. The document aims to cut the number of licensing regulations which, according to domestic business organisations, analysts and international observers, have been stifling the conduct of business in Bulgaria for years.
The excess of licensing regulations has been constantly criticised in reports from KPMG, the World Bank and the Bulgarian Industrial Association (BIA). The Government presented its new programme on April 17. The ensuing discussion seemed to indicate that muncipalities as well as the Government were to blame for the high number of licensing regulations.
Economy and Energy Minister Petar Dimitrov said there were a total of 1935 administrative and licensing regulations in Bulgaria. Only 392 of these were legal edicts, while Dimitrov said that 1275 were introduced illegally by municipalities.
The law states that only ministries are authorised to introduce licensing regulations. Municipalities can only be granted this right in extraordinary circumstances after a special legal act has been adopted by Parliament. Nevertheless, Dimitrov maintains that municipalities have been introducing licensing regulations that would be deemed unauthorised in any other country and liable to be contested in court. Municipalities have also been collecting fees in exchange for licensing regulations.
Following Dimitrov’s words, Prime Minister Sergei Stanishev said that he had asked State Administration Minister Nikolai Vassilev to exercise control over regional governors – the state representatives at local level – and prepare a list of municipalities’ unauthorised licensing regulations. The Government would then abolish illegal regulations, Stanishev said.
Bozhidar Danev, chairman of BIA, said it was not just the municipalities who were to blame for the number of licensing regulations. Danev said that BIA’s data showed that the number of unauthorised regulations was 1151. Danev said that some of them were imposed by the Government and some by municipalities. He also said that not a single regional governor had taken legal action against municipalities.
The National Audit Office had also failed to take action, Danev said, because it did not care how municipalities gathered revenue provided it was collected. Another Government failing, Danev said, was the requirements included in the Budget 2008 Act. One of them stipulated that the money collected in the state budget in 2008 from fees should be 14 per cent higher than last year. This had only encouraged ministries and other state bodies to introduce more licensing regulations in order to meet the increase, Danev said.
Ginka Chavdarova, head of the National Association of Municipalities in Bulgaria (NAMB), said that employers’ organisations had to be more active in alerting the NASMB when there was a licensing regulation that was introduced by municipalities illegally. This was one of the ways to “locate incorrect municipalities”. According to her there were no more than 11 municipalities that had introduced licensing regulations on their own.
Later in the day Vassilev attended a hearing of Parliament’s anti-corruption committee, alongside BIA’s deputy chairman Kamen Kolev, where more details of the puzzle were revealed. Vassilev said that lack of political will was the main reason for which most licensing regulations had not yet been abolished. Since 2003, nothing had been done to ease business dealings in Bulgaria, he said. He warned that the Government had to take urgent measures during the rest of its term.
Like Dimitrov, Vassilev blamed municipalities. He said that he had relied on municipalities to ease the process of licensing regulations but with little positive result.
Kolev was restrained in his comments but said that the fact that municipalities had different fees for licensing regulations was a serious problem. You could pay between 50 and 600 leva for the same licensing regulation depending on the municipality, he said. Furthermore, some municipalities continued to offer licensing regulations despite their illegality. He said that licensing regulations should not be abolished completely but, instead, substantially decreased. The regulations helped to offset the grey economy, he said.
On April 22 NAMB’s media person Maria Koumatova told The Sofia Echo that NAMB was currently collecting information from municipalities to see how many licensing regulations had been introduced illegally.
“Once we have the list we can say how many of them should be revoked,” she said. The list should be ready by the end of April. “We are trying to ease business dealings. We’re not in favour of introducing licensing regulations illegally. However, from what I see, there are municipalities that attract more investments than others and I doubt that this has to do only with licensing regulations. Attracting investments is a complex matter depending on things such as infrastructure, not just regulatory frames,” Koumatova said.
