A taxation scheme can only be effective if it efficiently serves economic policy goals: economic growth and the best interests of enterprises and households, Minister of State for the Utilization of EU Funds Balázs Rákossy said at a taxation forum of the heads of tax authorities held in Budapest.
In the interest of making further progress, EU Member States must learn from one another and take united and coordinated action so that we may fight tax evasion increasingly more effectively, Balázs Rákossy stressed at the 13th G28 taxation forum. Quoting a recent report of the European Parliament on tax evasion he pointed out that this problem caused a VAT shortfall of EUR 170bn in the budgets of member states in 2013. There is no effective national strategy without parallel EU-level action, he added.
Speaking of Hungary’s taxation policy, the Minister of State said the key issues of the reforms the Government had introduced were the transformation of the entire fiscal system, the introduction of a flat-rate income tax and tax reduction. With the introduction of the flat-rate income tax and the family tax allowance, initially some HUF 500 billion extra income remained at employees. With the introduction of the family tax relief on contributions in 2014, this amount reached almost HUF 600 billion, and will rise to HUF 660 billion by 2015. Since July 2010, small and medium-sized enterprises have also enjoyed a significant tax reduction.
In his speech, Balázs Rákossy also highlighted the success of measures aimed at combating the black economy and improving economic transparency. In the case of the most important taxes and contributions, excess revenues totalled more than HUF 650 billion last year compared with the year before, which is a significant increase also on the scale of the national economy, he pointed out.
By the end of August, VAT revenues were up by HUF 136.7 billion, or 7 percent, compared with the corresponding period of the previous year. In addition to the online cash register, the electronic trade and transport system launched as of 1 March has also been responsible for the increase, he said. Thanks to the international cooperation of tax authorities and the fact that EU states are joining multilateral exchanges of information in increasingly large numbers, the loopholes which tax evaders are exploiting will be eliminated one by one, the Minister of State concluded.
(Ministry for National Economy)
