THOUSANDS OF FIRMS NEAR BANKRUPTCY

There have been scandalous scenes following the Minister of Finance’s order.

The debates following the order to retain VAT often end in violence between entrepreneurs and tax officials. Tibor Draskovics, Minister of Finance ordered the Tax Office last November to check the accounts of companies which have trade connections with other EU countries in the case if they have demands of refunding VAT.

The procedure includes the checking of export companies on the basis of a list which in fact does not exist in the European Union yet, so the whole examination serves only the prolongation of the deadline of repayment, several entrepreneurs claim. Experts say the whole idea is just a manoeuvre of the Ministry of Finance to regroup the budget deficit for 2005. The retained sum is estimated as HUF 220-240 billion.

Translated by Péter Szentmihályi Szabó