Bulgarian singers to face the music over tax fraud

SOFIA (Reuters) - Bulgaria will investigate musicians for possible tax evasion as part of a drive to curb rampant fraud and raise budget revenues at a time of recession, the national revenue agency said on Monday.

The Balkan country's new center-right government, which won July elections on promises to tame corruption and crime, has launched similar checks on owners of luxury Bentley cars and football club owners.

A failure to show results in the fight against graft and powerful organized crime could lead to more sanctions by the European Union, which last year cut Bulgaria's access to half a billion euros in aid because of its weakness in tackling crime.

The revenue agency said there were many signs that singers declared only a fraction of the hefty fees they received.

"(Singers) lead a very expensive way of life which requires far more funds than have been officially declared, which is the reason ... for launching checks," said agency spokesman Rossen Bachvarov.

Musicians would have to pay back the taxes they owed if audits proved there were discrepancies between their real and declared incomes, he said.

Local media say musicians, especially the popular pop-folk artists whose numbers have exploded in recent years, get thousands of levs for a single gig -- at a time when the average monthly salary is about 600 levs ($460).

The tax police are also probing 800 football players for discrepancies between declared incomes and actual assets held.

In September, the revenue agency said some of the biggest football clubs in the country owed a total of 7.8 million levs in unpaid taxes and interest payments.

Tough-talking Prime Minister Boiko Borisov warned football club owners after an anti-AIDS soccer charity game on Sunday that the authorities would be uncompromising in tackling those involved in money laundering and tax fraud.

His cabinet has also taken action to curb smuggling in a bid to boost revenues and avoid an end-year budget deficit. Bulgaria, the poorest nation in the European Union, has been hard hit by the global crisis, which ended 12 years of economic growth.

(Reporting by Irina Ivanova, editing by Tim Pearce)