Bulgaria seeks to boost tax controls over Lukoil's Bulgarian unit
Bulgaria’s parliament backed bolstering tax controls over the country’s biggest fuels seller, owned by Russia’s Lukoil, as the government looks to boost revenue depleted by the state of emergency over coronavirus.
Under the changes, expected to be finally approved next Tuesday, Lukoil Bulgaria will have one month to apply to register as separate tax entities its six fuel depots along with a 400-km long fuel pipeline that runs from the LUKOIL Neftochim Burgas oil refinery across the country.
Finance Minister Vladislav Goranov said the changes were needed to improve transparency and proper collection of excise duties from fuel sales in times when the state finances are strained from the coronavirus crisis.
Lukoil Bulgaria, which controls the major fuel depots and has over 220 petrol stations, said it might be forced to halt operations as it would not have enough time to comply.
The customs office considers the six depots and the pipeline as one tax fuel depot at present.
The company’s current licence will be revoked if it fails to apply for new separate licences within a month and will have until the end of November at the latest to bring the new separate tax fuel depots up to customs office standards.
“In these times, when the budget is under pressure because of the crisis from the pandemic, we have to be as diligent as possible to collect what is due,” Goranov told reporters.
“It is virtually impossible for the customs officers to ensure reliable controls on a pipeline that can contain 27 million litres of fuels - which is the whole country’s consumption for several days - and which is linked with several fuel depots,” he said.
Lukoil Bulgaria said in a statement it would not have enough time to install costly metering equipment and software and that it has always been a diligent taxpayer.
In July 2011, the customs office stripped LUKOIL Neftochim Burgas oil refinery of key operational licences for its failure to install on time product metering needed to enable officials to monitor production and calculate precisely due taxes.
The refinery appealed the decision and had its licences restored in early 2012 after installing proper metering and reaching an out-of-court agreement with the customs office.
$1 = 1.8050 leva Reporting by Tsvetelia Tsolova; editing by David Evans
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