May 12, 2020 / 6:22 PM / 20 days ago

Bulgaria to boost tax controls over Lukoil's fuel seller

SOFIA, May 12 (Reuters) - Bulgaria’s parliament approved on Tuesday changes aimed at bolstering tax controls over the country’s biggest fuels seller, owned by Russia’s Lukoil in a move which the company has said may prompt it to halt operations.

The government said the changes will help the European Union country boost revenue depleted by the coronavirus crisis and improve transparency of fuel sales.

The opposition Socialists, as well as two business associations have decried the changes, warning that they will might push fuel prices up and slow economic recovery.

The finance ministry expects the small and open economy to contract by 3% this year, while the European Commission sees Bulgaria’s economic output shrinking by 7.2%.

Under the changes, 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.

The customs office considers the six depots and the pipeline as one tax fuel depot at present.

Finance Minister Vladislav Goranov has 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’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 to bring the new separate tax fuel depots up to customs office standards. The company, which controls the major fuel depots in the country and has over 220 petrol filling stations, has said it might be forced to halt operations as it would not have enough time to comply. ($1 = 1.8018 leva) (Reporting by Tsvetelia Tsolova; Editing by Lisa Shumaker)

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