Nearly 100 million leva are being concealed from taxation by hairdressers and home-based craftsmen, revealed Rumen Spetsov, head of the National Revenue Agency (NRA), during an interview with Nova TV. According to Spetsov, in 2023 there were around 12,100 officially registered businesses operating in hairdressing and cosmetics, alongside approximately 6,500 unregulated ones. The tax losses in this beauty sector alone amount to roughly 50 million leva. A similar figure - about 50 million leva - is attributed to the informal economy in home service activities. Spetsov stressed that the NRA pursues all cases with equal determination, whether the undeclared sums are as small as five leva or as large as five thousand.

Addressing widespread worries about the upcoming euro adoption, Spetsov dismissed such concerns as baseless, highlighting that since June 3, the NRA has launched extensive inspections across more than 30 cities and over 150 retail points. The focus is on monitoring price changes within 14 essential food categories, ranging from bread and dairy to mineral water. The agency aims to verify whether price hikes stem from justified reasons - like increased wages or costly raw materials - or if they are purely speculative moves by traders. While the NRA cannot dictate the profit margins businesses apply, it investigates the rationale behind price adjustments.

To illustrate, if a loaf of bread priced at 2 leva suddenly jumps to 2 euros, that would represent nearly a fourfold increase. In such cases, authorities will scrutinize whether the seller’s operations have changed in a way that justifies the rise; if no legitimate cause is found, it will be classified as an unjustified increase.

The switch to the euro will also bring changes to pricing methods. Goods priced at 2.47 leva, for instance, will need to be rounded to a more convenient euro figure—likely 2.60 euros. Spetsov cautioned that such “convenient rounding” might result in extra profits for some businesses, noting that even small increments like 20 stotinki matter significantly for vulnerable populations. To address this, the NRA is working closely with the Consumer Protection Commission and the Competition Protection Commission, with all three bodies having already signed a formal cooperation agreement.

Violations carry stiff penalties: individuals may face fines from 3,000 to 5,000 leva, while legal entities risk fines starting at 7,000 leva. The Competition Protection Commission also holds the authority to investigate suspected collusion among traders.

Officials acknowledge that the service sector - especially beauty salons, small repair shops, and restaurants - poses the biggest challenge for enforcement, as it is often the domain of the so-called "gray economy." This is where irregularities are hardest to prove and where monitoring efforts will be concentrated. Common breaches include improper dual pricing labels in leva and euros, often shown in different colors, which can mislead consumers.

Spetsov also shared details of ongoing probes into a major coffee chain accused of raising coffee prices by 12% and a well-known mineral water brand with a 15% price hike. Both are currently under investigation for possible sanctions.

Source: Nova TV