Economy Minister János Kóka and Finance Minister János Veres told a press conference following a cabinet meeting on Wednesday that it would not go ahead with revising the tax, which had been rejected by the Constitutional Court earlier this year. The „reasonable tax” had been expected to generate Ft 30 billion for the budget in the H2 of the year, and was part of a plan to cut the budget gap from just under 10% of GDP in 2006 to a targeted 6.7% this year.
Veres said firms whose pre-tax result does not reach a certain proportion of their adjusted revenue will have to submit an additional tax report and face an audit. It is not yet known whether the stricter regime will yield Ft 30 billion as targeted, said Veres. But, there were other ways lost revenues could be compensated for, he added. Tax evasion is a big problem in Hungary – just under half the country’s 315,000 firms are loss-making on paper or report neither loss nor profit and a majority of private businesses do not pay taxes.
Opposition Fidesz is opposed to tighter monitoring of businesses reporting losses, said the party’s pundit for economic affairs Mihály Varga, at a Wednesday news conference. Varga said the move meant that the government was using the tax office to threaten the country’s citizens and its economic players, adding that it was employing „the arrogance of power” to try to influence people. Instead, he said, Fidesz believes that taxes have to be cut for all businesses that can create jobs. However, in the current situation, Hungary’s central issues must be equilibrium and closing the economic gap, he added. (google.com/news, Bg)
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