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Bulgaria tax hacking: An entire nation was hit (cnn.com)
107 points by heshiebee 30 days ago | hide | past | web | favorite | 55 comments



It is probably too much to hope for that the exfiltrated data includes tax returns for the country's kleptocratic elite. Bulgaria has the worst corruption in the European Union.

Seeing just how little tax is paid by the rich could start a movement for change. Then again, it may simply be seen as a sad confirmation of what everybody knows.


Maybe you are not from Bulgaria. The taxes are pretty low - 10% on pretty much everything - capital gains, on your salary, etc. So there is not much tax evasion.

But there are worse issues here, for example: corruption, stealing of European and government funds, oligarchic control of the power, etc.


Bulgaria underground economy was the highest of the EU27. Is it possible that low/high taxes has no correlation with tax evasion?

A good tax office, effective laws and public awareness seems more important than how high or low are taxes.

I only found data from 2012: http://jalac.kyxar.fr/ANG/ECONOIR11.html


IMO the statistics in your link are severely wrong and don't reflect the real-world situation.

I live in Austria and the underground economy here is way WAY bigger than 8.2%.

Most small restaurants/bars/cafes here are cash only and rarely(never) hand out receipts. Also, tips are a large source of income for workers in the service industry and many are paid under the table.


>I live in Austria [...]

>Also, tips are a large source of income for workers in the service industry and many are paid under the table.

I thought tip culture isn't really a thing in Europe?


When baristas are paid as little as €3/hr (post-crisis Greece), tips are a survival requisite.


Generally you tip 10-15% for a proper sit down meal, that's all.


Generally it differs from country to country, it’s intellectually lazy to say these things about Europe/Americans/Africa.


In Greece, you tip 1 or 2 euros. Maybe 5 if the bill is over 100 euros or something like that.


How could tax evasion not be correlated to the rate?

It’s expensive to hide tax money, especially when you can’t use it for investments.

The higher the rates the more it’s worth the risk and difficult work it takes to hide it from the gov. Which typically involves two or three parties (the person paying you without the paper trail, you trying to hide it, and the bank or organization where you plan to hide it in).


> How could tax evasion not be correlated to the rate?

To make such a statement you need data. I can argue for the opposite to be true and an inverse relationship exists. Look for countries with very low taxes (like South Africa) and the to ones with high taxes (like Sweden). You will see that lower taxes correlate with higher evasion.

My data is not very rigorous. That is why I think that i requires further work to get to a conclusion. Can you present data that justifies your point?


> The taxes are pretty low - 10% on pretty much everything

And about 20% on national insurance. And 20% VAT. Not that low.


>But there are worse issues here, for example: corruption, stealing of European and government funds, oligarchic control of the power, etc.

Ah, the Eastern Europe usual problems...


I'm from Eastern Europe and lived in quite a few western European countries and believe me, politicians here are corrupt to the bone as well, just that the people enjoy a higher standard of living and have more disposable income so they're not too bothered by the constant theft going on in the politics high above.


is it that much worse than in the US? my city of ~800k is just finding out our senator and relations found a way to get $500M o federal funds to dramatically increase the value of the land they and their friends bought shortly before the project was started. sadly with as much detail as I provided you probably still can't be sure which city I'm talking about because it happens everywhere. Regulatory capture in the communication, medical, defense, and banking industries is obvious and unchallenged. How bad is Bulgaria?


Oh wee lamb. Americans just have no idea about the scale of corruption in other countries. The kind of thing you mentioned has always existed in America. I was just reading an article about how they constructed MD450 in Maryland in the 1920s (a highway from DC to Annapolis). There was already a perfectly good mostly concrete paved road between DC and Annapolis (MD214/Central Avenue) at the time, a few miles south of the intended route for MD450. But some of the politicians involved owned land in the northern part of the affected counties, and insisted that a duplicative northern route be built. In the end the highway was obsolete almost soon as it was built, and the John Hansen Highway (now US50) was constructed to interstate freeway standards just a couple of decades later. At the end of the day, this sort of thing is bad but not fatal. It's usually a matter of politicians finding some benefit in a project or policy that can be justified for objective reasons. (E.g. whatever you think about our communications policies, for example, they're supported by a large amount of academic research, and served as the model for regulatory reforms in Europe in the 1990s and 2000s.)

The corruption outside of places like the US is of a completely different sort. It's straight up stealing and bribery. Worse, it infects larger segments of the society and government. At the end of the day, it's not really a big deal if a highway is redundantly built a few miles north of an existing one. But lower-level government workers asking for bribes to do their jobs, widespread tax evasion among ordinary people--that stuff isn't just wasteful, it's fatal to the ability of the country to function. It's basic math--there's relatively few elite, and some corruption at the top doesn't add up to much in terms of the overall economy. But when corruption trickles down to the middle class, it's infected the bulk of your economy.


I'm assuming this comment got flagged because of "oh wee lamb", which I agree is not a good look. The rest of it is a detailed and good faith argument, so I vouched it. It would simplify things for the thread if that first bit could get edited out.


No, someone flagged it before I added that.


I actually found the that endearing and the post was /. insightful. I'm not convinced that it is somehow less harmful for the 1% to be corrupt than the 10% but it was an idea I had no considered because of my class envy.


Then I'm lost. Who would flag the rest of this?


Clearly someone the author forgot to bribe.


Isn’t corruption basically legal in the US under the name of lobbying?

All the PACs and Super PACs that donate endless money, without divulging origin to candidates, so that they’ll push through their agenda?

Like where’s the fiber broadband the government paid billions for to the telecoms?


Lobbying is legitimate. PACs are a legitimate dilemma. But if the denizens of hackernews decided to pool their money together in order to run ads in support of something, should they be disallowed?


When I read news about the US that's the impression I've got. I'm from Spain, and we (and our neighbors) are quite vocal about our corruption, but the more I read the more I realize that the stuff that is happening here would be just legal somewhere else.

Here a party receiving money from companies is a big deal.


It's partially (not entirely) a myth about US politics.

The majority of political donations come from individuals.

Obama for example raised $1.23 billion from individual contributions over his political career. Out of about $1.5 billion total.

For Trump, about 60% of his campaign's funding came from individual donations (about $220m), his money included. Trump gave about $66m to his own campaign, or around 20% of all the funding. Supporting PACs spent around $100 million.

Hillary Clinton got about 71% of her campaign funds from individual contributions (around $405m). Her supporting PACs spent around $210m.

For the prominent Ted Cruz vs Beto O'Rourke Texas Senate battle, Cruz got 77% of his funding from individual contributions.

From there you'd have to look into the share of the PAC money that comes from individuals versus companies etc. PACs commonly derive a large share of their funding from individual contributions. For some of that you can get good figures, some of it is shadowy.


Some people donate individually and not from their business because they don't want anyone looking deeply.


The difference is people are indirectly benefiting in developed countries so actual infrastructure gets built with government funds. In developing nations frequently so much is directly skimmed that the project never does whatever it was supposed to do.

It’s the difference between inefficiency and direct theft.


I would say that the only difference is due process

But having operated in many “corrupt countries” now, I would say that the only difference is due process that you respect

From our perspective we will never respect how Bulgaria cronyism works, and Bulgarians will never respect how American cronyism works

We’ll call ours due process and imagine Bulgarians are sliding money under tables to get anything done, and they’ll flat out call the outcomes of our system corruption as well

(But there are a lot of favors happening outside of the legal framework too)


Exactly! The biggest differences between developed countries and the developing one is not IMO how much regulatory capture and corruption, its only in the scale. And in the developed counties the scale is often so big, its too big to fail.


This will happen again and again because governments in developing countries don't understand importance of IT security, where people with no qualifications (often nepotism) works on protecting very important data. Not to mention that someone who is qualified to work there is often working in private sector for 3 to 5 times bigger salary due to govt. regulations on public sector salaries.



Hint: it’s not binary.


Yeah, the two most common forms of cyber security I've came across are:

a) Don't know much, don't care much, don't really do much; or

b) Super paranoid that we're going to need really expensive consultants and buy really expensive products, and do lots of manual because automation is insecure, need to be on-prem, basically 10-15 years behind.

Neither really patch servers, but often the guys that care are so behind the times they're actually worse.


Granted, he said very important data.


In the US, enough major insurers and credit bureaus have been hacked that I wouldn't be surprised if the majority of US SSNs have already been compromised...


> I wouldn't be surprised if the majority of US SSNs have already been compromised...

We’re way past that, there have been multiple individual incidents that have exposed a majority of US SSNs.


Nearly everyone save for a tiny minority overestimates what can reasonably be kept safe. A good rule of thumb is that if the data exists, it will leak.


"governments in developing countries"

Like the US, right?

https://en.wikipedia.org/wiki/Office_of_Personnel_Management...


Most people in Bulgaria are more concerned that the breach gives new weapons to scammers. There are a handful of groups that scam old people to transfer money pretending to be their relatives in need. There are groups that steal properties or even companies by doing a transfer with fake documents (then the property is resold of course).

The finance minister said on the TV these are anyway illegal activities with or without the leaked data. The problem though is that nobody was imprisoned for such crimes for ages, just like there are no politicians going to prison in the last ten years. Guess how many people believe him now.


Sweden “solves” this problem by publicising everyone's tax records, along with almost everything else the government knows about them.


I wonder how such a breach will affect pay equality in the country. Theoretically soon everyone could publish how much the different ranks, genders, etc. in each company are making, and give people a nice data to start negotiations from ...


This should make it trivial now to see which locals are being paid by foreign military contracts in order to facilitate tradecraft.


does this include foreign companies? bulgaria is a popular low tax destination for other countries.


Anyone know how GDPR would handle fining a country? 4% of GNP would be hefty.


Since Bulgaria's privacy officials would be in charge, any penalty they'd dole out would be paid by the state to the state.


I know you're just trying to exploit the somewhat widespread cynicism and accusations of hypocriticism for humor, but that just isn't how it works.

While fines are routinely used against citizen, companies, and other private entities to force compliance with the law, the absence of fines in the relationship between courts and the executive quite obviously does not imply that the government is free to ignore the law.

This should be obvious, considering there are lawsuits against the government in the news every week. Fines are simply not necessary because public servants are duty-bound to follow court orders. In modern democracies, this is not just theory. Ignoring a court's order is virtually unheard of. It would be a major breech of the rule of law, a tenet more central to democracy than even voting. I wouldn't want to see what happens, although the risk has certainly risen in the last, say, two years, at least in the US.


> In modern democracies, this is not just theory. Ignoring a court's order is virtually unheard of.

This might be true for the older/western democracies. Sadly this is not the case in Easter Europe. As we say in Bulgaria - the law is a door in a field. You can go around if you want.


https://www.yahoo.com/news/cyber-expert-charged-huge-bulgari...

The tax agency is facing a fine of up to 20 million euros ($22.5 million) over the breach.


With the fine going where?

Probably to general treasury; which the tax office is essentially free to withdraw from.


I do wonder whom that would hurt more to do so. The taxpayer or the kleptocrats in power? Ultimately, we want the right heads to roll and we want it to sting like hell.


nothing. The state pays itself, it s just 2 records in balance sheets canceling out


Could the mods add (Bulgaria) to the title?


We've switched to the HTML doc title.

ferros 30 days ago [flagged]

I submitted this 14 hours ago, same source...?

https://news.ycombinator.com/item?id=20490428


It's ok for there to be reposts if a story hasn't gotten attention yet.

https://news.ycombinator.com/newsfaq.html




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