Brian Banks, Director of the Program for Modernization of Bulgarian Financial Administration

- Mr. Banks, do you believe you will repeat your success from the State Customs in the Taxation Authorities?
- I hope so. Our new Project has an extended scope of responsibilities. The two Projects already implemented for the last few years were related mainly with the State Customs. You know very well that the State Customs revenues have increased by 182% for this 5 year period.
It is my conviction that the consultations we are going to provide to the State Customs and Taxation Authority will allow them to enhance their revenue receivability, however I cannot guarantee their increase by 182%. The duration of our Project is 18 months, and within this period it is our intention to implement the best practices for VAT control and supervision, and also against money laundry, we will keep on working on provision of information for the State Customs and in terms of the excise receivability.
I am optimistic and I believe that our expertise will allow the State Customs and Taxation Authority to improve their procedures in a way to advantage the future revenue increase.

- Can you tell us some of the proposals for increase of the Budgetary revenues?
- I am not intended to provide any further information without the explicit authorization of the Financial Minister. On behalf of Crown Agents 10 permanently based experts are going to work under this Project in Bulgaria, however others will also be assigned on a short-term basis.
The Initial Phase of the Project will be completed at the end of July. Then I am going to submit a Report to the Minister of Finances, describing our intentions in terms of the scope of activities to be implemented during the period of Project duration, which completes at the end of December 2008.
I would like to make it clear that we are Consultants and we provide consultations; whether these consultations would be adopted or not depends mainly on the people they are provided to.

- Well, let’s assume our Financial Ministry adopts all of your advises. In that case what extent of increase has to be expected?
- I dare not say to make any assumptions. We do know however there is a deficit in the anticipated public revenues and particularly in terms of the VAT and excises so let’s hope we will be able to provide adequate assistance to the competent Agencies to cope with this deficit.
Still, we have got seven months behind our back and we have got five more months to work ahead in terms of achieving the budgetary goals for 2007.
We have an enormous experience in terms of the VAT and excise receivability within the European Union. Bulgaria has been a member of EU for 6 months, so we believe we can provide it with many useful consultations.

- There are talks about the State Customs is going introduce new excise labels for the alcohol items. Do you believe this measure will lead to increase of excise revenues?
- Each measure that could break off the loss of budgetary revenues is a good measure. If the Director of the State Agency has identified the areas requiring such control and supervision, then I approve his initiative.
In the revenue control, the prevention is one of the best measures. Thus, the people inclined to breach the Law can respect it. Therefore respective measures binding people to pay their obligations have to be implemented.

- Having increased your area of consultation, do you intent to expand your team here in Bulgaria?
- As I already said we have here in Bulgaria 10 permanently long-term assigned consultants. Seven of our people are here and three more experts have been also assigned. Our team is a multinational, including Dutches, Swedes and British specialists. The variety of nationalities in our team provides a level of good knowledge in terms of the EU procedures.
It is my opinion that the new team will be capable to identify the problems of the country and the potential of VAT frauds related and resulting from our joining to EU and the open boundaries, in particular between Bulgaria and Greece.
The remove of boundary supervision and control provides a possibility for the VAT smugglers to transfer goods without paying the due taxes and duties. Based on our experience in UK we know it is a serious reason for loss of VAT. Many countries in the EU suffer from this problem which is the so-called “VAT fraud carousel”.
This is a typical problem for each country within the EU however is particularly live issue for the new EU members.. Therefore thanks to our long-term experience we can provide our consultation expertise to the Bulgarian Taxation Authorities.

- One of your biggest successes was implementing of mobile groups. Do you intent including such mobile groups in your new Project?
- If you have mobile teams able to go everywhere and are capable and trained, they can be really effective in capturing the law offenders.
That’s why I do recommend continuing the practice on using the mobile teams and their activity, and if possible to increase them. You know there are 15 mobile teams in the State Customs now.
Such teams would be useful also in the State Revenue Administration. We hire experts to assist our mobile teams in this activity. If the Minister of Finances would like to help him in creating such teams, it is my opinion that they will make a great deal of assistance for the State Taxation Authority. There is a great potential in practice and therefore we have been using such mobile teams in our work in many European countries.

- You know the State Customs are far behind their intentions in terms of the excise receivability. Which are the problematic areas in their work and are there any “hidden reserves” in the excise area?
- I would like to remind you that by July 1st, last year the State Customs had no experience regarding excise receivability. Before that, this activity was part of obligations of the National Revenue.
We know that lot money comes from the excise – from alcohol, tobaccos and fuels. In our previous Project we identified areas where control be improved. The Director of the State Customs Agency accepted our recommendations and our measures have been implemented. We commenced our latest Project with 10 mobile teams and as a part of the second Project we created 5 more mobile teams which main goal was related to excise receivability.
So our work has been already started however the big question is about a lot of money and in a very serious area. We have excise warehouses, fuel warehouse and the point is to identify the risky areas and to focus our attention to them, either with our teams or by means of permanent control conducted by a specially trained specialists and experts.
- Do you thing the scheduled values set in the Budget from excise revenues could be achieved?
- We would do our best to assist and help the State Customs to achieve their budgetary goals and if possible to exceed them. You know last year the State Customs has exceeded its schedule and I congratulate their Director, Mr. Assen Assenov and I wish him to have such achievements also in this year.
- In what way the State Customs image can be improved as now it is known as one of the most corrupted State Administrations?
- Again, I am going to mention the prevention. If you have a corrupted employee in a State Administration, firstly he must be identified and convicted and all this made in a public conditions. We do have problems with the corruption in UK and it is a worldwide spread problem for every country.
We need to elaborate a methodology for identification of corrupted employees and work on prevention in terms of their colleagues.
- Recently a couple of custom-officers have been arrested for smuggling of mobile phones on Sofia Airport. What would be the potential outcome of this case according to you?
- I read about it in the newspapers however I am not personally aware with this case. If their guilt can be proved and the smugglers go in prison then it is a perfect preventive measure for their colleagues and friends.
The problem with the corruption is of a great importance for each country and many people demand results at the very moment, we all wand justice, don’t we?
In many of the cases there are accusations however the person is innocent until pleaded guilty. That is the democracy.
Anyway I believe that people with proved accusations have to be punished severely because this will give a warning to their colleagues.

"Trud" Daily