Hungarian Prime Minister Péter Magyar says the government will submit legislation allowing the tax authority to investigate politicians’ wealth, potentially going back 20 years, including officials whose mandates ended within the past five years.

NAV could investigate politicians’ wealth

Magyar announced on Thursday that the government would immediately submit a bill to Parliament introducing wealth investigations for politicians. Under the proposed system, the National Tax and Customs Administration (NAV) could examine whether politicians’ assets and lifestyles are consistent with their declared, taxed income and wealth declarations.

The proposal would allow investigations to look back as far as 20 years, according to Magyar. It would cover current politicians as well as people whose mandates ended within the previous five years. Other reports on the announcement also say the proposed checks could extend to assets held by people living in the same household.

The planned legislation would apply to members of Parliament, prime ministers, ministers, state secretaries, government commissioners and prime ministerial commissioners, Magyar said.

For current officeholders, NAV checks would begin after two years from their first appointment, according to the prime minister. If a member of the current Parliament or government resigns or is removed from office, an automatic check would begin within 30 days, he said.

What would the checks cover?

According to Magyar, NAV would receive the powers needed to carry out detailed investigations into politicians’ financial circumstances.

The authority would examine assets including:

  • properties and other real estate;
  • bank accounts;
  • company interests;
  • insurance policies;
  • investments; and
  • other assets that may not have previously been disclosed.

The information would be compared with politicians’ wealth declarations and taxed income, followed by a risk assessment, Magyar said.

If NAV finds no irregularities, the procedure would be closed. If there is a discrepancy between declared income and wealth that indicates a possible tax violation or illegal income, a detailed tax audit would follow, according to the proposal as described by Magyar.

If investigators suspect a criminal offence, NAV investigators would notify the National Office for Asset Recovery and Asset Protection, the prosecution service or the police, he said.

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Names could be published in cases involving major tax shortfalls

The proposed rules would also introduce a public disclosure mechanism. Magyar said that if an investigation establishes at least HUF 5 million in unpaid tax, the person’s name, position and the amount of the tax shortfall would be added to a NAV publication list.

The government had already announced in July that it planned to introduce wealth investigations conducted by NAV, with checks potentially extending 20 years into the past. The government said at the time that the system would also involve politicians and people living in their households.

The latest announcement sets out further details of the proposed system, but the legislation still needs to go through the parliamentary process before the new rules can take effect.

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Government says new system would go beyond wealth declarations

Magyar said the proposed investigations would address what he described as a gap between politicians’ official wealth declarations and their actual financial circumstances. He said the system would apply not only to former politicians but also to current and future officeholders.