In the past ten years, Hungary has regained its financial sovereignty which required the elimination of the black economy and the extra state revenues in the magnitude of tens and hundreds of billions of forints arising therefrom, the Parliamentary State Secretary of the Ministry of Finance told the newspaper ‘Magyar Nemzet’.
In an interview published in the newspaper’s Saturday edition, András Tállai said since the summer of 2018 businesses had forwarded the data of some 80 million invoices via the online invoice system. Thanks to this, the tax authority is now in possession of a pool of data which is able to instantaneously offer an almost fully comprehensive picture of the state of the Hungarian economy, he added.
He stressed that almost 900,000 businesses had joined the online invoice system, and this summer the development of the system had reached a new stage. Before, businesses were required to swiftly submit to the authority information on invoices whose VAT contents reached one hundred thousand forints. However, since 1 July, this limit has been cancelled, meaning that businesses are now required to send the data of all invoices to the tax authority, the State Secretary said.
Mr Tállai also mentioned that until the end of September businesses should not expect to face sanctions if they fail to fully observe the new regulations in the case of smaller transactions.
The period of the epidemic highlighted that the extent of the black economy had decreased significantly since 2010, he underlined, adding that according to estimates, during the 2008-2009 crisis some one quarter of all VAT was not paid into the budget due to fraud or for other reasons. This, too, played a part in the fact that despite ongoing tax increases implemented by the Gyurcsány Governments, the budget did not have sufficient revenues, and it was effectively a loan of the International Monetary Fund that saved the country from bankruptcy for which the “culpable practices” of the then left-wing government were mostly responsible. “All they could do to eliminate the black economy was to start an ‘invoice lottery,’ while the tax authority – in the absence of any better ideas – commissioned a doll to popularise taxation,” he said.
Mr Tállai said the economic damage done by the coronavirus epidemic is not in any way lesser than the devastation caused by the 2008 credit crisis. “The difference is that Hungary’s economy is stable, the Hungarian population is one of its chief lenders, and state revenues are being raised continuously even during the crisis,” he said, adding that online cash registers, the electronic monitoring of cargo traffic and most recently, the introduction of online billing play an enormous role in the latter.
With reference to the latest EU estimates, the State Secretary said these days only nine of every one hundred forints of VAT are not received by the central budget. To a large extent it is this circumstance that made it possible for the government to introduce tax reductions even amidst the “virus crisis,” and as a result, we did not need enormous loans from abroad, he said.
“The crisis truly demonstrated that in the past ten years we have regained our financial sovereignty,” Mr Tállai said in summary, stressing that the policy of tax reductions will continue in the future as well.