In his justification to the bill, Economy Minister Mihály Varga said that the concept of tax secret should be taken broadly, and apply to any information concerning taxation. Parties of the leftist opposition have protested against the proposal saying that it was a way for the government to cover up donations to its “strategic partners”.

The total amount of donations each taxpayer makes as well as the total amount each beneficiary receives will not be classified as a tax secret under the law. But the details of each donation a taxpayer makes or each donation a beneficiary receives will be thus classified.

This detailed data “belongs to the private and business sectors”, according to the bill. At a news conference, LMP co-leaders Bernadett Szél and Ákos Hadházy complained that the bill was being fasttracked. Szél said LMP would turn to the Constitutional Court for a review if the bill ended up being fast-tracked.

Hadházy urged the government to apply equal standards to multinationals and small and medium-sized firms. He added that in a normal country tax laws take decades to change, whereas in Hungary these are changed in the space of a single day.

On Monday, opposition and ruling Fidesz party members of parliament’s legislative committee clashed over the bill’s then-planned fast-tracked passage. Sándor Burány of the Socialists said fast-tracking was uncalled for, arguing that the state budget was not in danger.

He also said the bill would classify some 800 billion forints (EUR 2.6bn) worth of transfers as tax secrets.

Corporate tax reliefs are public funds, he said, adding that certain entrepreneurs make donations to some government members’ favourite soccer teams in the form of “bartering”.

Róbert Répássy of ruling Fidesz responded, saying that corporate tax reliefs were not public funds, arguing that they were a part of taxpayer revenue not deducted by the state. No type of tax relief can be considered public money, Répássy argued.

Socialist MP László Varga argued that the soccer team of Prime Minister Viktor Orbán’s native Felcsút received a significant amount of donations. He said such donations should not be classified, arguing that corporate tax breaks in professional sports were considered as direct subsidies.

On Tuesday, Varga called on President János Áder not to sign the new legislation once the changes are “forced through parliament”, or else they would turn to the Constitutional Court in cooperation with LMP.

He said the donations were primarily given to sports clubs “occupied” by Fidesz politicians, and insisted that those funds would then “slowly but surely lose their public funding character”.

András Tállai, head of tax authority NAV, said in parliament on Tuesday that the changes were motivated by “good intentions”.

He added that the changes were “not significant” and were aimed at “preserving the current level of (data) protection”.

He insisted that “more stringent conditions and access to some of the data together” would result in greater transparency.
Republished with permission of Hungary Matters, MTI’s daily newsletter.

MTI photo: Máthé Zoltán