Tax revenues received by Hungary’s Treasury increased by HUF 547bn year-on-year despite the fact that tax reductions had left some HUF 860bn at families and enterprises this year, Minister of State for Parliamentary Affairs and Taxation András Tállai said at an executive meeting of Hungary’s Tax and Customs Administration (NAV). As the Minister of State pointed out, the online system for filing returns for personal income tax (“e-PIT”) has made a successful debut this year and by 2021 the majority of tax returns of PIT are expected to be prepared by NAV.

Until 13 December 2017, state tax revenues totalled HUF 12 000bn (EUR 38.7bn) this year, up by some 5 percent compared to the same period of 2016, András Tállai announced. The diminishing size of the shadow economy, growing economic output, improving taxpayer morale and the NAV’s new, customer-oriented attitude have boosted fiscal revenues despite the fact that this year’s tax reductions had left some HUF 860 at taxpayers, he added.

Tax controls were carried out in a supportive manner, András Tállai emphasised. Encouraging a law-abiding attitude has proven to have a positive effect on tax revenues.

The amount received as a result of supportive controls was HUF 14bn at the end of November and the employment status of half a million people has been clarified. A new NAV scheme, the pre-announced on-the-spot controls, has also proven effective. This simple scheme, it has turned out, has managed to increase not only the number of occasions when receipts were issued but the amount of turnover and the number of registered employees as well. The scheme even caused turnover to suddenly double at some enterprises, the Minister of State noted.

The collection of tax arrears has also become more customer-friendly, András Tállai said. The era of prompt collection is now over, he said, as the forced collection of taxes does not begin immediately: the tax authority issues a prior warning about arrears of up to HUF 1 million. Up to the end of November 2017, those involved have voluntarily paid HUF 45bn after having received a warning, he said.

Court statistics show a high success rate which signals a high level of legal expertise at the NAV – even from an international perspective. In the observed period, 1300 administrative procedures have come to a conclusion, of which 75 percent were positive for the tax authority, the Minister of State stressed.

Among the tasks of next year András Tállai mentioned mentoring, as tax offices are preparing for the tax mentoring of 80 thousand new enterprises per year. Following a test period, the on-line billing system -- another instrument aiming to improve economic transparency -- is scheduled to be fully functional as of 1 July 2018. The new scheme will enable the real-time control of HUF 50 000bn of transfers annually between accounts and thus the filtering-out of fraudsters and fictitious bills. As of 2018, debt settlement related to administrative procedures has also been managed by the NAV, and the tax authority will also become responsible for the enforcement of court orders as of 2019. For the NAV the change will result in more than one million enforcement orders to manage but for taxpayers it is going to significantly reduce liabilities and simplify processes.

Until 2021, the NAV is going to gradually take over more of the bureaucratic burden, the Minister of State said. In addition to cutting red tape, another positive result is expected to be that NAV is to save HUF 700bn through preparing tax returns for enterprises and private persons as well. This year, the tax authority has filled in tax return forms for 4 million private persons and next year they are going to prepare tax returns drafts on excise taxes as well.  This will bring tax return drafting on VAT one step closer; it may ease the bureaucratic burden of about half-a-million enterprises, he stated.

(Ministry for National Economy)