Hungary orders action plan to fight black economy

Banking

Hungary’s government has instructed the tax and customs authorities and related departments to prepare an action plan on combating the black economy, Prime Minister Ferenc Gyurcsány said on Tuesday.

The black economy is estimated at 18% of the GDP, at the lowest, and a 1-3 percentage point decrease would result in extra revenues for the treasury in the range of Ft 100 billion (€394 million, $546 million), which could be spent on education, culture and lowering the tax brackets, he said. Gyurcsány also mentioned some possible means in the battle. In the cases which make tax authority APEH suspicious, the public dues could be levied for at least the previous 3 months based on an estimation made by APEH, or VAT-evasion in the construction industry could be fought against through an analysis of the material costs of the given investments. The government will discuss the authority’s proposals at the end of September and will propose amendments to the relevant laws and decrees.

The main opposition Fidesz party, at the same time, thinks that the black economy could be suppressed through cutting taxes, reducing the red tape and fighting corruption, Fidesz spokesman Péter Szijjartó told reporters. (Gazdasági Rádió, people.com.cn)

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