The planned reform of European Union VAT rules must ensure equal treatment for member states, Economy Minister Mihály Varga said at a meeting of EU finance ministers in Brussels on Tuesday.
The Ecofin meeting saw participants present their positions on the deepening of the economic and monetary union, Varga said in a statement.
The Hungarian government believes it is important that the talks on VAT reform include all member states and not just euro zone members, he said.
“We agree that VAT rules need to be simplified and that the scale of tax evasion should be reduced, but we continue to stand by our electronic system for oversight of goods transported by hauliers, an innovation that has been proven effective,” Varga said. The fact that it has been adopted by several member states is a testament to that, he added.
According to the European Commission’s proposal, the VAT reforms would provide more flexibility to set reduced VAT rates and would cut red tape for small and medium-sized companies, Varga noted.
The reform package establishes a 2 million euro revenue threshold across the EU, under which SMEs would be subject to simpler VAT measures, he said. But the Hungarian government has already initiated raising the threshold for VAT exemption so that more entrepreneurs could take advantage of the favourable measures, the minister noted. Varga said the EU’s reform proposals could help speed up the assessment of Hungary’s request and secure a favourable outcome.
As regards a recently-announced package of measures aimed at helping member states adopt the single currency, Varga said the EU should rather focus on strengthening its cohesion policy, arguing that it was the most effective tool in helping non-euro member states catch up.