SOFIA (Reuters) – There were some embarrassed faces at Bulgaria’s tax office on Thursday after an investigation found more than 400 tax inspectors had failed to pay their traffic fines.
The Balkan nation has launched a crackdown on civil servants who don’t pay what they owe, as part of plans to stamp out rampant fraud and raise revenues during the recession, the national revenue agency said.
Those tax officials caught will have money deducted from their February salaries to pay the fines.
More than 50,000 civil servants also face being checked for unpaid taxes and fines in March, a sign of the pressure Sofia is under at home and abroad to demonstrate results in its fight against graft and crime.
In July the European Union is due assess the government’s record and failure to show progress could threaten access to more EU aid after in 2008 Brussels froze millions in aid over fraud.
Some political analysts and EU diplomats say the center-right government, elected last July on promises to restore the rule of law, has so far spared powerful oligarchs and big tax evaders.
“It’s good to see things happening in Bulgaria but so far it has only targeted small fry,” one EU diplomat in Sofia said.
The cabinet led by tough-talking Prime Minister Boiko Borisov has also been checking musicians, owners of luxury Bentley cars and football clubs for possible tax evasion. No results have been reported so far.
Sofia has own praise for cutting spending and taking action to curb smuggling in a bid to boost revenues and avoid a big budget deficit. Bulgaria ended 2009 with a budget gap of 0.8 percent of GDP, the lowest in the EU.
The poorest EU nation has been hard hit by the global crisis, which ended 12 years of economic growth.
(Reporting by Anna Mudeva; Editing by Matthew Jones)
Thu Feb 25, 2010 11:13am EST