Lost VAT receipts due to black economy shrink 7 percent in 2 years

Citing a European Commission study, Hungary’s economy minister has said that tax evasion has dropped significantly in the country. The government’s measures to whiten the economy have been effective, and tax evasion in Hungary is now half the rate of other countries in the region, Mihály Varga told MTI on Friday.

According to the commission study, the estimated margin of losses on VAT to the treasury stood at 20.9 percent in 2013, and this shrank to 13.7 percent by 2015. Varga said this achievement is “unquestionable”. Last year Hungary made the third biggest improvement in this area in the European Union, and this year the country is in fifth place on this score, he noted.

Varga said that undoubtedly the most significant factor in the improvement has been the introduction, in September 2014, of online cash tills linked to the tax office.

“I’m confident that greater tax morale, in addition to the economic whitening, will lead to VAT losses to the treasury falling by 10 percent in 2018,” the minister said.

Source: MTI