Varga urges European effort to fight VAT fraud
Budapest (MTI) – Hungarian Economy Minister Mihaly Varga and Andrej Babis, the Czech finance minister, at a conference in Prague on Friday urged a European strategy to eliminate VAT-related fraud.
Both Varga and Babis agreed that the introduction of reverse taxation would be an efficient measure, the Hungarian economy ministry told MTI in a statement.
At the conference, Varga said that cross-border VAT fraud had become an organised and large-scale “industry” using loopholes arising from differences in the rules of each country.
Citing figures from an EU survey, Varga said that in 2013 fraudulent taxpayers had caused damages of nearly 170 billion euros in uncollected VAT, while Hungary’s central budget loses 1.7-2.5 billion euros each year.
Fraud could be reduced through reverse taxation, Varga said, and noted that Hungary has successfully employed that measure in the “most infected” sectors such as wheat and scrap metal trade. For example, he said that wheat exports and imports with some neighbouring countries had fallen by up to 70 percent, and VAT revenues for construction increased by 30 percent. In all, VAT revenues to central coffers grew by 8 percent last year and by 5.4 percent between January and November this year, he added.
Photo: MTI
Source: http://mtva.hu/hu/hungary-matters
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