November 27th, 2013

Ex-tax auditor says economy minister knew about alleged tax fraud

Public accusations by former, offended officials undermine the government’s measures to improve tax morale, government spokesman Andras Giro-Szasz told MTI on Wednesday.

The spokesman responded to former tax office auditor Andras Horvath’s statement earlier today that several MPs of ruling Fidesz, including Mihaly Varga, the current economy minister, had known about alleged VAT fraud at the tax and customs office (NAV) before he turned to senior government officials, including Janos Lazar, the state secretary heading the Prime Minister’s Office, to call their attention to these cases.

Horvath claimed that several large companies have failed to pay taxes totalling around one thousand billion forints (EUR 3.3bn).

Giro-Szasz said that “dissemination of such rumours further deteriorates of what is already a low tax morale” and is against Hungary’s interests.

Horvath told opposition members of the subcommittee of Parliament’s budget and audit committee that “to his knowledge” the parliamentary group of Fidesz had dealt with the issue in spring 2011.

The subcommittee’s members representing Fidesz stayed away from Wednesday’s hearing, and as a consequence, the session was not classified formal. Spokeswoman Gabriella Selmeczi said that Horvath had made criminal accusations and the case must be investigated in a criminal procedure which is the duty of the prosecution rather than Parliament. She added that a tax auditor is bound by the obligation of keeping tax secrets therefore Horvath could only elaborate on generalities at a formal committee session.

Horvath said before the committee that he had previously turned to Fidesz lawmakers to call their attention to the case.

He said that a “cover-up mechanism” of high-value VAT scams started in 2007 under the previous government when NAV had been regionalised with officials from the “other political side” appointed in senior positions. Horvath claimed that these officials had firm backing of oligarchies with strong and successful influence on the three governments since 2007.

Horvath claimed that the billions of scam forints had “landed” on accounts mostly in the Netherlands and Switzerland, but also in Slovakia and Romania.

The former NAV official held up a folder saying it contained company data as evidence that for instance in 2011 the state budget had been “shortened” by 29 billion forints (EUR 97m) in unpaid tax.

Horvath said he was ready to hand over these documents to the prosecution and the State Audit Office ASZ upon their request.

Government spokesman Giro-Szasz noted that Szabolcs Vamosi-Nagy, former deputy chief of the tax office, had ruled out the chance of hushing up such a large-scale fraud. Within the tax office, at least 10 to 15 officials, or even up to 25 could have had information about the case. “And if so many people know something, it cannot be kept in secret for long,” he said.

Opposition Socialist leader Attila Mesterhazy asked Prime Minister Viktor Orban in writing whether Lazar had received any note from Horvath and if so, what measures he had proposed or taken.

Lazar, in response, told MTI on Wednesday evening that he had not received from Horvath any official document, letter or report in connection with the tax fraud. He said Fidesz lawmaker Mariusz Revesz had signalled to him an anonymous notification lacking concrete details. He said he told Revesz that he was available either for meeting his “anonymous friend” in person, or for an exchange in writing.

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  • MagyarViking

    Fidesz spokeswoman Gabriella Selmeczi said that Horvath had made criminal accusations and the case must be investigated in a criminal procedure which is the duty of the prosecution rather than Parliament, then in the Parliament only Fidesz enemies are investigated

    • Dr. Papcsák

      Fidesz is clean!

      • wolfi

        As clean as the Balaton water – but as smelly as the Hévíz lake …

  • Corrigator

    As it turns out, this guy has never been a tax auditor, due to his lack of proper qualification.

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