The Bulgarian Gambling Commission (BGC) has said the country is losing hundreds of millions of lev (BGN) each year to foreign online gambling operations.
The Gambling Act states that all gambling operations carrying on business in Bulgaria must be licensed – a provision that is being breached by many foreign online operations, according to the BGC. BGC representative Simeon Simeonov said the Commission has fined dozens of these companies for not holding a license.
BGC statistics estimate that illegal online gambling sites’ total turnover in 2006 from Bulgaria was BGN500m (USD363m), rising to BGN700m in 2007, and BGN1bn in 2008. Turnover for 2009 is expected to be in the region of BGN1.5bn. Independent statistics on annual gambling turnover in the Balkan region, which covers some 130m people, estimate the figure to be around EUR4.5bn per year, much of it driven by Internet gaming.
Alexander Tumparov, Deputy Chairman of the Bulgarian Association for Entertainment and Gambling Games, said that unlicensed online gambling operations are in breach of nine laws, including the Corporate Income Tax Law, the Law on Measures against Money Laundering, and the Criminal Code. Last year’s assertions by BGC Chairman Dimitar Terziev that changes would be made to gambling regulations – namely, increased fines – to crack down on illegal online websites, have so far not materialized.
Bulgaria has been making efforts to tackle a culture of tax fraud and evasion after the EU froze aid to the country because of its concerns over the extent of these crimes. The heads of the National Revenue Agency and the Customs Agency recently signed a cooperation agreement in an effort to meet targets set by the Ministry of Finance to reduce revenues lost through tax crimes. Also, the tax and police authorities announced this week that they would tackle cross-border tax evasion, thought to be worth around BGN2-3bn per year; they are to focus mainly on imports of fruit and vegetables from Greece and Macedonia.
A comprehensive report in our Intelligence Report series examining the new possibilities that offshore e-commerce open up for business, and analysing the offshore jurisdictions that have led the way in offering professional e-commerce regimes for international business, with a particular focus on e-gaming, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report6.asp
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