All fees collected by the Trade Register should be used to upgrade the system

Madam Minister,

Madam Deputy Minister,

Colleagues, 

The beginning has raised hope for the recovery of this Consultative Council. This was one of BCCI’s requirements in order to support the idea to move the Trade Register in the first place. For us, this Council remains an important condition and we will participate actively in it, so that there are notable results of the suggestions made here and the documents prepared. Unlike the others, I have prepared a detailed written Position Paper because Verba Volant, Scripta manent.

I will focus on some of the main points, including the facts which became known to us just today. I will skip listing the positive changes made, some of which Mr. Vladimir Penkov of the Bar Council already mentioned. What do we still consider a flaw of the Register? 

First of all, in our opinion restricting the access to the Register will change its initial purpose. There are two approaches – either to pay in order to use the Register or to pay for registration. The two approaches cannot be applied simultaneously and since we have adopted the payment for registration approach, the purpose of the Register is any member of society to be able to check, at any possible required moment, the status of a merchant. There is nothing better than this and we have said on multiple occasions that establishing an electronic register is a huge step forward as compared to the previous registers at each District Court. Therefore, we do not approve any form of restriction of the access to the Register and insist the access to remain free. If there is any information, which should not be made available to the general public, then it shouldn’t be entered in the Register or displayed on screen. If for any other reasons (lack of money, insufficient capacity, etc.) the Register is incapable of performing its functions, outsourcing could be considered, as we have suggested on previous occasions. 

What does it take for the financial reports to be entered on time? They need to be scanned and afterwards certain files need to be uploaded – this operation is not that difficult. In other countries it is normal to make your business plan and schedule, especially because you already have certain experience and must know how long it will take, how much it will cost you, and what the work-load of each employee is, what the size of your staff is and all their expenses. It is possible to make a business plan and if an external company offers to you to perform the work for 75% of the price or for half price, I see no reason to spend budget money on something that can be supervised only, while the technical work related to the input of the data is done by someone else, who will also bear the respective responsibility for it.

You said that in the future some sanctions will be regulated for officials who don’t observe the time limit. It would be wonderful if the 3-day-term to announce the decision is kept, but there should be a sanction for prolonging the term as well. In this sense, for the businesses which BCCI represents it is extremely important that annual financial reports are submitted to one institution only. Whether it would be here in the Agency, or in the National Revenue Agency, according to the businessmen it would be enough to present them once. Any businessmen should become reconciled with the idea of presenting annual reports for the sake of transparency of the company’s activity, but it is unacceptable to have to wait in line in 2 places. 

Other arguments – for the tariffs I will tell you that we have certain experience in obtaining information and gathering financial results. Even if the information is entered manually in an Excel sheet, instead of simply scanned, this under no circumstances costs 30 or 50 BGN. We can do the same thing for 10 BGN per report. BCCI collects no feed for information provided on digital carriers. If you think you should continue spending budget money, please preserve this practice, but we will not agree, under any circumstances, to present submit to two different institutions something which a state body has already received accordingly. Until the second lodging of the reports is abolished, be warned that we will not cease our efforts to put an end to this practice of wasting the businesses’ time. 

The Consultative Council works hard – we bothered ourselves to develop sample Rules for the work of the Council, which I present to your attention. 

The most important question remains – about the tariff and the price for the service. We know that there is a Working group discussing the tariff. It was very useful to us to learn that you don’t receive even 25% of the collected fees, even though this is regulated by law.

The other important condition, based on which BCCI and its members agreed to have such register is that all fees collected by the Register should be used for it, without a penny going into the budget. The registration is not intended to serve as a new tax for companies and means of collecting money from them even if it is provided by law (according to our information or I may be wrong – 60 million were collected last year). As stipulated by law, our analysts reckoned that you were given 15 million, and it turns out that you didn’t receive even this. From now on, you shall have in our face a very serious ally. We will renew our support before the institutions and will even write to the Minister of Finance. This practice should change. We would like for the business an environment in which taxes aren’t disguised under other forms, while we boast with lowering taxes. 

So our position is clear – all fees collected by the Register should be spent for it. If you search in the records my previous announcements, you will see that 2 or 3 years ago we were clear and categorical that all money should be used for the Register. If some year it turns out that you have made your business plan wrongly – for example, you have collected more money than you will spend, then you should consider what else could be improved – whether it would be an update of the software, purchase of additional servers, training of personnel, etc. If all this is done, then one day the company registration in Bulgaria could become for half of the current prices. This is the only way to work. 

As far as funding the activity of the Registry Agency is concerned – there are 2 ways to get out of this situation. Either to change the budget law so that your money isn’t taken, or to change the status of the Agency - so that the money remains for the Agency and it is possible to reduce the fees. In this case, be advised that we will categorically be against any increase of fees.

We will not accept an additional tax for Bulgarian companies in a time when we are discussing measures to improve the economic environment. We very much approve what you have done with the sample forms. It is no wonder that there are different practices. We also had different practices and this was one of the reasons to agree and to look for other solutions beside court registration. Back when we registered our branches, 28 different District Courts required 14 combinations of documents. It is no wonder that these things happen in the Agency. We completely approve creating sample documents. You can make them in the form of checklists – to cross out whether they have a certain document or not. We will support these actions as much as possible and in the future we will work in this direction too – to restrict the personal discretion of the employee checking the documents, to establish clear rules and a checklist. Things can be divided into types. Our modest experience of 100 years shows that this is possible with company registration. At BCCI, there is no room for initiatives of the persons checking the documents on every step.

Once again, I would like to say that I am pleased with the data you provided for us and the 2-day-limit to make a decision regarding the registration of companies. Unfortunately, the situation with the financial reports is still unclear. I thought they were delayed by months, but if you say some of them have been waiting for years, it must be so. We are ready to provide any form of assistance so that this is done in a quicker manner.   

08.07.2011