Save Tax Specialists From Extinction, Continuing Conference Center Blues, and How to Avoid Feeling Like a Future Short-termist Jerk
As is now tradition, the Budapest Business Journal has asked a wide variety of folk in business and services around the country for their wishes for 2020 – the Chinese year of the Rat.
Climate Change? What we all Need is a Good Dash of WMKP!
I’ve been worrying about climate change for more than 30 years, and then suddenly in 2019 everything happened at once: Fires ravaged Brazil, the United States, the Arctic, and then Australia. Sun-and-seaside lifestyles, the hopes of so many, turned to ashes and dust in a few days. And Extinction Rebellion protests and climate strikes sprung up around the globe.
At least Budapest seems safe enough, except for snowdrops in early December. But living in a bubble won’t stop millions of European migrants surging northwards from the Mediterranean when, in a few years’ time, the same immense fires rip across Greece, Italy, Spain and Portugal. That bubble won’t help when high temperatures cut Hungary’s domestic agricultural yields to levels below that needed to sustain civilization.
So my wish for 2020 is that people in positions of influence in Hungary start to be more intelligent and responsible about climate change and the destruction of the natural world: businessmen and women, investors, people in government office, policy makers, people on television and other media.
I hope they realize that focusing your life around getting richer and more powerful is, well, plain stupid when you have a climate emergency going on. Remember those sun-and-seaside lifestyles? Such assets that constitute wealth become worthless when things break down.
I use what I call WMKP. It’s a tool to help myself, and anyone, make business decisions which resolve the conflict between short- and long-term interests.
Each time you are faced with a business decision, ask yourself the question: Would My Kids be Proud? It encourages you to consider the longer term implications of any investment or decision; look ahead 20, 30, 40 years and think about what your kids or grandchildren would make of the decision, looking back at it from the future.
If you’re gonna look like a selfish, short-termist jerk in their eyes, it’s probably not the right decision.
James Atkins is chairman of Vertis Environmental Finance, a Budapest-based, regulated investment service provider active across Europe in emissions trading, climate finance and strategy. He is also the author of “Climate Change for Football Fans”.
Let This Year be Less Taxing, More Understanding
I wish 2020 to be a year of goodness, love and going back to basics. It is a world that is changing too fast to have time to grasp it. Technologies are replacing manual work in VAT compliance work, yet at the other extreme, they miss practical details.
I wish that we can just be good with each other, understanding, and do our best as the future looks bright for tax professionals.
Ancuta-Elena Cotuna is from Romania, and a tax compliance specialist, based in Budapest
Teenage Tram-travelers Study for Their Dreams in Miskolc
I meet teenagers every day who have a dream. They have come from destitute, rural communities in Hungary’s north-east into Miskolc, the main city in the region, in order to study, to get a secondary and higher education. They have to cope with the extraordinary gap between the perspectives of their villages and the opportunities, requirements and lifestyle of an urban high school and its dormitory.
They learn how to swim, they begin to speak English and they typically enter into romantic relationships, but without becoming parents too early, because they have plans to graduate from a university some years later.
They frequently suffer and have to fight against racial prejudices, as they are Roma.
2020 will not be long enough to fulfil their dreams. But they have at least taken the decision to work their way out of their impoverished villages and life as an uneducated communal worker depending on social grants.
And a year is enough to change their mindsets, to become confident students with far higher expectations.
The Martin Luther King dormitory and Dr. Ámbédkar High School, both located in Miskolc, are the best places for them to kick start their difficult, life-changing journeys.
They take the trams in the city every morning, with their exercise books and in sports kit. Many not in the dorm leave their homes in darkness to start school at 8:30 a.m.
Some passengers cannot believe their eyes: you can see it in their faces. Why do these Gypsy youngsters go to high school while others sweep the streets? But some passengers watch, and hope that these young people have made the correct choice. My wish is that these passengers will be proved right.
Tibor Derdák, an MP in the democratically elected Hungarian parliament of 1990-94 (the first free election after the fall of communism), is the director of both the Martin Luther King dormitory and Dr. Ámbédkar High School.
Give Youth a Chance, and Proper Reimbursement
My wish for 2020 is for young adults like me to get more chances to show our talent, creativity and to make a living out of them.
Becoming financially independent is not easy for university students and people who are about to start building their careers, especially in Budapest.
Coming from Gyula, a small town next to the Romanian border, establishing a life in the capital would have been basically impossible without the help of my family.
However, as I’m getting closer to the end of my university studies and more and more enthusiastic to start working in the field I’m interested in, namely the film industry, I also have a strong desire to at least partly finance myself; I don’t want to further burden my parents.
The biggest barrier I have encountered so far is that most employers are happy to hire us… without a salary. The first time this happened to me I happily agreed as it was a job that I really wanted to do; besides it looked good on my CV. I enjoyed it a lot.
However, working five or six times a week, more than 12 hours a day for two months without getting a penny (or forint in this case) didn’t feel so right.
I learnt a lot during work and I managed to become a little more experienced, thus I can say it was worth it. However, I also learnt that, next time, I want people to reward my work, the years I have spent studying and producing references for myself.
This is why my greatest wish for this year is for people around my age to get the attention and chances we deserve because I strongly believe that this generation is a highly competitive one and competitiveness is a quality that will be needed more than ever soon enough.
Bea Magyar, from Gyula, is a third year BA student reading Communication and Media Science
Peace to all Tourists – and What About a Conference Center?
As tourism is my field of expertise, I wish that Hungary continues to be an “island of peace”, and the serious growth of recent years continues.
Last, but not least, I hope that the government leaders, and this after 20 years of lobbying, finally decide to build the 5,000 people capacity Conference Center instead of new soccer stadiums.
Péter Kraft, is head of Kraft Associates, a tourism consultancy. He was government Secretary of Tourism (1999-2000), and is a former ambassador for the country
Reform, not Rhetoric, for an Innovation-friendly Environment to Support Domestic SMEs
Our next contributor wanted a wish for the decade, rather than a mere 12-months!
Three decades after the so-called “regime change”, I wish for a fourth decade that will usher in a modern age of enlightenment in Hungary, leading to a period of seizing, rather than wasting, opportunities.
But for this to happen, we need to face up to the problems and to fundamentally change our attitudes in many, many areas.
In particular, heads of SMEs have long been waiting for a more innovation-friendly business environment in reality, and not just in rhetoric.
Hungary, a country largely lacking natural resources, must develop innovation as the basis for its national economy, and this should be nurtured through a package of measures, including favorable tax policies.
Sadly, our national policies have long ceased to consider the enterprises capable of creating an alternative to the piece-work economy provided by the foreign companies that have set up in the country.
Basic reforms are also required in education. In total contrast to today’s focus on short-term results, innovative thinking should become the main focus in public, professional and adult education.
And let’s not forget the public sector. Here the list of social innovation measures is also long, but absolutely necessary to serve the development of the Hungarian-owned economy.
We could learn, for example, from Estonia when it comes to the transformation of the state administration. There, reforms resulted in both a faster, more efficient service and a reduction in civil service employees.
The result of such policies would be an environment where Hungarian-owned SMEs could develop and flourish, to truly become the backbone of the national economy, in turn supporting higher living standards across the country.
So, finally, what could an SME leader wish for himself and his colleagues? Many satisfied customers, who in future will seek to buy products which were developed and manufactured in Hungary.
János Reith is executive director of Direct-Line Kft, a Hungarian company with some 30 employees manufacturing stainless steel products such as swimming pools. Based in Dunaharaszti, 15 km south of Budapest, Direct-Line operates its own R&D unit.
Don’t Write off the Tax Professional, at Least not yet, and Certainly not in Hungary
Being a tax advisor for more than half my adult life, I have witnessed overwhelming changes in the business world, the greatest of all being the introduction of the artificial intelligence. Governments around the world have been making systematic efforts to develop AI as their developing “armed force” in raising taxes.
Tax collection is a complex task for which governments need uncompromising, automated minds to ensure smooth compliance by taxpayers without the chance of human errors: the process embraces the monitoring of taxpayers’ revenues, detection of fraud, automated tax auditing and decision-making, all to prevent tax evasion.
In the ambitious vision of the Hungarian National Tax and Customs Administration (NAV), it will be able to prepare personal income tax returns for natural persons starting from 2020, and automated VAT returns for companies starting from 2021.
So far, so good. Yet, while AI robots acting as tax accountants/tax officers seems to be unlikely, doomsayers already envision the extinction of tax professionals as a species.
Certainly, if it is to decrease compliance costs for companies and make life easier for decision makers, let it be. But AI has its limits, and its risks. One issue is that Hungarian tax law is versatile and frequently changing, which requires potential AI systems to be constantly updated.
But an AI system is not able to update itself, manual adjustments will always be needed. Just to mention a few: credits and exemptions rules, allowances and deductions, the various quantitative and other applicable limitations (especially if international tax law is also part of the game), all these will need to be updated, by specialist humans, in order to accommodate policy changes. Thus, please do not bury the profession prematurely!
Nevertheless, AI can be developed into a potential backup warning system, a kind of watchdog, which will help both corporations and governments establish the main risks and draw the necessary red lines.
With this in mind, I wish a successful business and “intelligent” tax compliance to all of us in 2020.
Lilla Stricca is managing director of CCSG Hungary Kft., a Hungarian professional services provider, specializing in tax advisory and VAT compliance in cross-border transactions.
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