Hungary’s tax office NAV publishes investigation material

Budapest, November 26 (MTI) – Hungary’s tax and customs office (NAV) has released the results of an investigation following allegations last November of VAT graft by a former NAV employee, Andras Horvath.

In a statement on Wednesday, NAV said the investigation, which together with its annex comes to 1,200 pages, established that the whistleblower had wrongly claimed that the tax office had failed to take action against tax cheats.

The statement said that an investigation of the former employee’s allegations had been necessitated since Horvath’s charges had lacked a factual basis. “Given the allegations based on his experience at the tax office were not underpinned by concrete evidence” , the sources of these experiences had to be examined point-by-point, and responses given to the question of whether any abuses had taken place, the statement said.

Last November, Horvath held a press conference in which he alleged that some of the larger domestic companies and multinationals evaded VAT to the tune of over one trillion forints (EUR 3.3bn), and that they had been assisted by the tax authority and people in government circles. Two days later, the economy ministry said it had carried out an investigation, establishing that the tax office had carried out its tax inspections according to the relevant regulations and in an unprejudicial way.

Horvath said the investigation documents released by NAV were “frivolous and ridiculous”. He told MTI on Wednesday that there was nothing in the 1,200 pages that support the conclusions NAV had drawn. Asked about an interview he had given in which he said there was no evidence of corruption, he said that he did not have to know about it. Rather it was the job of the authorities to uncover it, he added. Horvath insisted the investigation by the tax office had been a mere “alibi” and its queries inputted into the system had been based on general parametres. All this proves is that the tax office had worked during the period of the investigation, he said.

Citing a so-called “green dossier”, Horvath said he had submitted to the prosecutor’s office a dossier containing documents proving that abuses had taken place, and it lists several companies that the tax office failed to investigate despite information available showing that they were involved in a network of fictitious invoices. They included companies involved in grain trading and the food industry, he added.

The NAV said Horvath had drawn mistaken conclusions based on his experiences and interpretation of data concerning inspections of the wheat industry. The majority of inspections were still ongoing at the time, and “he therefore falsely claimed that the tax office was not fulfilling its tasks in the inspection of this tax sphere”.

The statement said that the former employee had not been authorised to collect any information concerning official inspections of the wheat industry after October 19, 2012. Abusing his legal privileges, he made data requests concerning 150 taxpayers, it added.

NAV said that the audit report of Horvath and a colleague — the controls assigned to them — contained mere assumptions ungrounded in evidence.

At the end of October this year, green party LMP said that it had won on appeal a lawsuit against NAV, which meant that the tax office had been obliged to release the details of the investigation which swiftly followed Horvath’s revelations.

Following Horvath’s complaint, the National Bureau of Investigation ordered an investigation against an unidentified perpetrator on suspicion of abuse of office on December 9 last year. In November this year, the National Police Headquarters (ORFK) told MTI that it had a suspect in its investigation.

NAV rejected Horvath’s accusations after his press conference last year and submitted a libel complaint against him. Subsequently, the police ordered an investigation and raided his home on December 19.

Source: http://mtva.hu/hu/hungary-matters