World Bank Criticizes Bulgaria for Forming and Allocating of State Fees

The World Bank finds serious shortcomings in the way in which state fees are formed in Bulgaria. A report by bank experts shows that the policy of forming those fees is uncoordinated, inconsistent and nan-transparent, BNR reported.

In the period between 2005 and 2008 fees in Bulgaria have risen by 60 percent on the average. According to Bulgarian law, they should cover the costs for services, provided by the administration. Some state agencies keep a significant portion of the fees - up to 70 per cent and allocate the amounts as bonuses, which is, in practice, illegal.

The so called "restrictive fees" also contradict the law, World Bank experts say. The report gives an example of such fees - the 5000 BGN fee for registration of tour operators. This is equal to the fee for those who want to open a hotel with more than 500 rooms which is a significantly tougher task for the administration, since it has to look through a number of technical documents and to conduct on-the-spot checks.

According to the experts from the World Bank the aim of the high fee for the tour operators is not to reflect corresponding administrative efforts or costs, but to restrict competition. A similar example is the charge for opening a pharmacy - again 5000 levs. The aim of this fee is to prevent opening of seasonal pharmacies in resorts because it is believed that such stores are more likely to be improvised and to sell fictitious or imitation drugs.

However, the role of taxes is not to regulate the market, the World Bank notes.

Therefore the advice to Bulgarian administration is to set the concept of reimbursing its costs in forming the prices and to establish clear criteria for calculating of those fees. The issue of which agencies should be allowed to keep profits also has to be considered. However, restrictive fees should drop out.