A right ol’ Goulash: but departure of top Hungarian tax official brings some relief Reviewed by Momizat on . [caption id="attachment_5519" align="alignnone" width="614"] In October 2014, thanks to a whistle-blower in the Hungarian tax office, Nemzeti Adó- és Vámhivatal [caption id="attachment_5519" align="alignnone" width="614"] In October 2014, thanks to a whistle-blower in the Hungarian tax office, Nemzeti Adó- és Vámhivatal Rating: 0

A right ol’ Goulash: but departure of top Hungarian tax official brings some relief

In October 2014, thanks to a whistle-blower in the Hungarian tax office, Nemzeti Adó- és Vámhivatal (the NAV), it emerged that high NAV officials had been engaged in practices that are more commonplace in third world countries, rather than a fully paid up member of the EU and NATO.

In October 2014, thanks to a whistle-blower in the Hungarian tax office, Nemzeti Adó- és Vámhivatal (the NAV), it emerged that high NAV officials had been engaged in practices that are more commonplace in third world countries, rather than a fully paid up member of the EU and NATO.

On July 20, it was reported that Ildikó Vida, Hungary`s top tax official, had finally resigned from her position following a period of almost a year appearing on a US no-fly list for certain Hungarian citizens.

In 2014, tensions that have been building between Hungarian tax authorities and foreign multinationals in Hungary reached boiling point, despite previous diplomatic efforts to defuse them.

In October 2014, thanks to a whistle-blower in the Hungarian tax office, Nemzeti Adó- és Vámhivatal (the NAV), it emerged that high NAV officials had been engaged in practices that are more commonplace in third world countries, rather than a fully paid up member of the EU and NATO.

High NAV officials were reported to have offered their services to the CEO of Bunge – a leading agribusiness and food company with 35,000 employees worldwide and turnover of USD 57 bln – for 2 billion Hungarian forints (about USD 7 mln) –  to be paid to a foundation with ties to the Hungarian ruling party, Fidesz. In return, they offered a lowered VAT on foodstuffs, a longstanding  demand of food producers. For this sum and as part of a full customer service, the NAV also offered to go after Bunge’s competition.

In Russia, this practice is called raiding and has been a well proven route by ambitious officials to build up business interests of certain Russian oligarchs and otherwise supplement their official income.

Other information provided suggested that Bunge`s CEO was not unique in terms of receiving this service from NAV.

Vida has close connections with Hungary`s prime minister, Viktor Orban – welcomed at an EU meeting by its head as ‘Dictator.” Vida was a member of the by now famous Bibó College which Orbán, Lajos Simicska, former treasurer of Fidesz and now a wealthy businessman  (see later),  László Kövér, president of the parliament and József Szájer, a member of the European parliament, attended.

As a result of the furore, the US authorities took steps to inform six Hungarian citizens that they would not be welcome to seek a visa for entry to their country at any time soon and until further notice. Vida has been the only individual prepared so far to publicly acknowledge that she is on this list.

Orban sought to get Vida to take libel action against the US diplomatic representative but then reinsured his position by seeking a state audit of the NAV. Vida was also known to be a close associate of Lajos Simicska, a former close friend of Orban and himself a former head of the NAV who has recently experienced a serious falling out with Orban over taxes being levied on his business.

In March 2015, it was reported that the audit conducted by the State Audit Office found a  HUF 3.8 trillion – about 20 percent of the state annual budget, –  hole at the scandal-ridden Hungarian tax office. This contradicted an internal audit commissioned by Vida at the beginning of that month which had found everything at the NAV to be “in order.”

This seemed to provide a reasonable amount of political cover to Orban to seek a personnel change which Vida endorsed through her resignation that took effect in July.

Photo courtesy of Wikimedia/Varius.

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