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Hungaryʼs VAT gap falls to 6.6%, below Austria, Denmark

Hungaryʼs VAT gap, the difference between expected VAT revenue and that actually collected, fell to 6.6% last year from 21% in 2013, Minister of Finance Mihály Varga said, commenting on an annual report published by the European Commission, according to

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Varga noted that the rate had fallen since 2014, when the government started requiring businesses to use tills connected directly to the tax office.

He added that the government has since rolled out an electronic monitoring system for truck deliveries and introduced electronic invoicing, squeezing tax evaders further.

The EC study shows the VAT gap in Hungary fell 5.1 percentage points in 2018, the biggest drop in the EU. Hungaryʼs estimated VAT gap for 2019 is under those of Austria and Denmark, Varga said.

He added that the crackdown on tax evaders would continue as a lower rate of tax avoidance allows the government to continue its policy of reducing taxes, even during the coronavirus crisis, while maintaining the fiscal balance.