Monetary Incentives of Tax Whistleblower Programs: On Their Design and Implementation

Svetlana Gercheva ()
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Svetlana Gercheva: University of Economics - Varna, Varna, Bulgaria

Izvestia Journal of the Union of Scientists - Varna. Economic Sciences Series, 2023, issue 2, 41-51

Abstract: The instant contribution discusses the monetary incentives established in tax whistleblower programs. The latter have been already designed and implemented in some developed OECD countries. Tax policy makers in Bulgaria are also considering mandatory awards for whistleblowers from proceeds collected from evaded taxes and/or social security contributions. However, the monetary incentives built-in to a possible tax whistleblower program have sparked controversy in Bulgaria, a country with past experience in whistleblowing due mainly to political and/or ideological reasons. Nevertheless, tax evasion is widespread in this country with a tax gap of BGN 2,0 -2,2 billion. Therefore, in order to improve tax compliance and collection, a tax whistleblowing program in Bulgaria should be considered and designed with regard to the public-private partnership framework. It has been also suggested in this paper that the awards paid by the tax authority to the whistleblowers in Bulgaria should be exempt from personal income taxation. The whistleblower program in this country may become a productive, although non-conventional tool for tax policy, given that its monetary incentives are aligned with the recommendations of the international good practice.

Keywords: tax evasion; tax whistleblower program; monetary incentives; mandatory whistleblower’s award; tax compliance; tax collection (search for similar items in EconPapers)
JEL-codes: H26 (search for similar items in EconPapers)
Date: 2023
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