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Millionaires in Bulgaria reach record high
Bulgaria is on its way to break the record of Russia in terms of rapid increase in the number of wealthy people in the country. Data from Bulgaria’s National Revenue Agency shows that, in 2008 the number of Bulgarian citizens with official incomes of more than 1 million leva has reached 87 persons. In 2009, which was the year most severely affected by the economic recession, their number decreased threefold and went as low as 28. 2010, however, saw an unprecedented increase in the number of officially rich people in this country, which has officially reached 1673 people. Or in other words, the number of wealthy Bulgarians has jumped 60 times!
A Radio Bulgaria interviewed Rossen Bachvarov, head of Communications department at the National Revenue Agency.
“This is undoubtedly a positive trend because rich people are the driving force of the economy and being rich is not a vice. On the other hand, the task of this agency is to make sure that everyone, no matter rich or poor, pays their taxes on the total of their incomes”.
What are the sources of incomes of rich Bulgarians?
As Rossen Bachvarov explains, the gamut of wealthy people is versatile, without focusing on any specific profession, sector or age. The paradox is that the sharp increase in the number of rich people in Bulgaria over the past year is a consequence of the economic crisis. Due to shrinking markets and non-performing bank loans, many companies had to sell their business or part of it. This happened also to one of the wealthiest Bulgarians who had to sell several of his companies last year. The receipts from the sales are written off in tax declarations as incomes.
What is the official explanation for the boom in the number of millionaires in Bulgaria in 2010? More from Rossen Bachvarov.............
“There are several explanations for this situation. One is that some individuals have sold their shares in their businesses. This is the logical explanation but it does not suffice to explain all cases. Most probably, the reason is that people in Bulgaria become more and more disciplined. They become disciplined to observe rules because tax rates in Bulgaria are among the lowest in the world. The second reason is the fear of sanctions and penalties. Over the past year and a half, the National Revenue Agency has taken more aggressive controlling measures, and is conducting more regular checks and audits. So, this is a combination of many factors that makes many individuals declare their real incomes officially”.
What about Bulgarians with incomes of more than 2 million per year? What is their number at the moment?
“In the “two million” club, there are a little less than 660 people, and the people who have declared more than half a million leva of incomes are about 3,800. This year the National Revenue Agency has set up a specialized section for VIP taxpayers. Its goal is to cover all individuals whose incomes exceed 500,000 for this year. And namely because wealth is not a vice in itself, these people will receive a faster service. However, their incomes will be subjected to more careful verification procedures”.
We cannot draw a comparison with other EU countries because such statistical data is not available but we could say that the Bulgarian millionaires are becoming increasingly younger.
“There are people aged about 30 who declare incomes of more than one million. These are young well-educated specialists and businessmen. The majority of them receive incomes as managers or members of controlling or management boards of various companies”, Rossen Bachvarov from the national Revenue Agency says.
Sat Feb 26, 2011 3:32 pm
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