Economics

VAT refunds totaling up to Ft 100 billion will be halted until next year due to extensive tax inspections ordered by the Finance Ministry to detect the causes behind unexpectedly low VAT revenues. This may affect more than 10,000 businesses holding a European tax ID. The government is justified in using stringent measures as Q2 inspections revealed a discrepancy between corporate tax returns and EU control data in more than half of the cases, State Tax Office (APEH) spokesman György Lovas said, adding that APEH will pay the due interest rate on late refunds. The real motive behind the time-consuming VAT inspection is to improve the 2004 budget balance at the expense of 2005 revenues, commented László Zara, president of the Hungarian Association of Tax Advisors and Accounting Service Providers. (Vg 1) P.P.