The chief of the Hungarian tax office resigns

Today’s been a busy day in Hungarian politics. In the last week or so it was hard to find timely topics, perhaps because Viktor Orbán was on a secret vacation on Croatia’s Mljet Island. He went to the same spot last year, traveling alone and amusing himself by watching football games. But now there is so much news that I don’t know where to start. After some hesitation I decided to write about Ildikó Vida’s departure from the Nemzeti Adó- és Vámhivatal (NAV/National Tax and Customs Office).

Vida was the president of NAV, which turned out to be a hub of government corruption. More than a year ago one of NAV’s employees went public with folders full of documents implicating NAV’s top leadership in tax fraud. I wrote about the case at least twice in November-December 2013: “Tax fraud scandal in Hungary” and “The plight of a Hungarian whistleblower.”

It was not only this brave employee of NAV who noticed that something was amiss in the tax office. Certain American companies also realized that their competitors could undersell them with the effective help of NAV, which “overlooked” their games with value added tax claims. The American businessmen went to the U.S. Embassy to complain. After ascertaining the accuracy of their reports, the U.S. embassy was instructed to call the Hungarian government’s attention to the widespread corruption in NAV as well as in other government and pro-Fidesz institutions. The Hungarian government, despite numerous American complaints, did nothing. It was at that point, in October 2014, that Napi Gazdaság, then owned by Századvég, a political think tank with close ties to Fidesz, revealed that the Americans had informed the Hungarian government that six officials and/or businessmen suspected of corruption had been put on a blacklist of sorts: they were barred from entering the United States. Six of them decided to remain silent, but Ildikó Vida, head of NAV, openly admitted that she was one of them.

NAV

U.S.-American relations hit an all-time low when the Hungarian government demonstrated its unwillingness to cooperate with the Americans in ferreting out corruption. The Hungarians claimed that they couldn’t investigate unless the Americans revealed the seven names, which they knew full well the U.S. authorities were forbidden by law from doing. Viktor Orbán himself got involved when he “instructed” Ildikó Vida to sue André Goodfriend, the U.S. chargé d’affaires in Budapest, threatening to fire her if she didn’t.

But it seems that, despite the belligerence of the Hungarian government, behind the scenes the Állami Számvevőszék (State Accounting Office) quietly began an investigation. They found “serious deficiencies.” That happened in March, and with their revelation the guessing game began. Would Ildikó Vida step down? And if so, when? Well, the guessing game is over. We learned today that Vida gave notice on May 20 and that today was her last day on the job.

She is not going out with a whimper, as her farewell letter to the employees of NAV attests. She talks about “five years of constant struggle” against “ideas entertained by the government concerning the organization and the personnel of NAV.” As usual, the government didn’t bother to discuss these plans with the management. In her opinion, these government plans “endanger the budgetary interests and the functioning of the organization. These were the circumstances that resulted–despite the prime minister’s request to the contrary–in my resignation.” Since in the last two months the government didn’t get around to appointing a new NAV chief, Vida asked one of the deputy chairmen, Árpád Varga, to take over her job as of tomorrow.

The secret of her departure was kept pretty well, except that János Lázár, who doesn’t always know when to keep his mouth shut, two weeks ago talked about a reorganization of NAV for which one needs new leadership. More importantly, from Lázár one learned that the government has far-reaching plans for NAV. These plans are still in a preparatory stage: the government doesn’t know in what ways they will change the method of tax collection; they don’t know what kind of organization will adjudicate tax disputes between taxpayers and NAV–the ministry, an independent organization, or an entirely new office. Everything is up in the air.

But this is how things go in the Orbán government on every level. A month ago Lázár, at a forum for architects, admitted that “the state is in dreadful shape. It is too large. It’s immovable and weighed down.” Confusion reigns on every level of the bureaucracy, mostly because for Orbán loyalty is more important than expertise. They got rid of everybody who served in the administration in the eight years prior to 2010. I suspect that by now Viktor Orbán himself realizes that something must be done and that’s why Lázár announced that far-reaching personnel changes are expected to take place sometime in the fall. Many assistant undersecretaries can say goodbye to their cushy jobs.

We most likely will never know whether Viktor Orbán really entreated Vida to stay, but it is unlikely given the administration’s determination to reorganize NAV. Moreover, Ildikó Vida is a close friend of Lajos Simicska. She followed him as chairman of the tax office after Simicska resigned in August 1999. Given the acrimonious relations between Simicska and Orbán, I suspect that Vida’s days were numbered irrespective of her troubles at NAV. The list of recently sacked friends of Simicska is getting longer and longer.

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Webber
Guest

“I suspect that by now Viktor Orbán himself realizes that something must be done…”
I do too, though I doubt that the bureaucracy will be streamlined. Orbán’s system needs jobs for the faithful-but-untalented. As you also suggested, firing Simicska’s people will provide such jobs, while simultaneously demonstrating that opposing the regime to the slightest degree and at any level will have negative consequences (Vida didn’t sue Goodfriend, though publicly instructed to do so by Orbán)
Elsewhere I see that Simicska’s companies have been put on a blacklist – banned from all state contracts.

Guest

I tip my hat to the ‘brave employee of NAV’ for throwing caution to the wind. Some Hungarians indeed are individuals of certain values and stand for what is right. Curious where that individual is today after becoming a ‘whistleblower’. In some cases, they go on to then live a somewhat tenuous existence.

iii222
Guest

After Janos Hari – the dictators of today will be the legendary liars.

tappanch
Guest

Analysis of the freshly published official employment data, 2015 May vs 2014 May:

For profit enterprises, without “fostered” workers: 1.8947 million vs 1.8492 million, +2.46%

Note:
Since January 1, 2015, we do not know how many of them actually work abroad, but are included here to enhance the Hungarian statistics. (Before that, we were given a quarterly data around 0.1 million) Since the pool of workers abroad can be as high as 0.4 million, the official statistical office can come up with optimistic numbers at will.

Fostered workers: 0.1944 vs 0.1026, +89.47%

Note:
The government halved the number of fostered workers right after the 2014 election,
then started to increase them before the fall municipal elections.

Realitycheck
Guest

Hungary is the only EU country not to agree to take in refugees – zero! OV and Fidesz bring great shame on Hungary.

http://budapestbeacon.com/public-policy/hungary-says-no-to-asylum-seekers-and-refugees/25485

At the end of WWII my family fled Hungry ahead of the invading Soviet army. They were taken into displaced person’s camps in Austria and were eventually granted entry into the US.

Today people fleeing war zones are turned away by a country whose citizen were welcomed by the west in both ’56 and at WWII end. Shame on you Victor Orban!

ER1956
Guest

Do you detect the Stalinist petty mentality in OV?

Always strongly immoral.

Never fair.

spectator
Guest

With all due respect, you’re wrong!

This is pure, undiluted Orbanism, nothing, but!

I’m afraid, pretty soon we have to apologise to Mr.Stalin for the comparison which certainly cast some unfavourable light on him if it continues to go on like this..!
After all, then only the Gulag was fenced, not a whole country!

By the way!
Just for the information of the “right”minded: the fence could be cut from both sides!
It means, we don’t have to wait for the migrants to cut that damned net, we can do it in advance, from the inside!

After all, the Hungarians are who get fenced in, and we all learned the lesson in ’89: the hell with the barbed wires!

Guest

And then that Gulag does bring up for me this from one who was deemed a traitor to his country and people for writing eloquently on the challenges facing a society wracked with prevarication and intolerance. From a man who always had something to say on that. I’d think his remark points to the gestation of all that in Hungary. The ‘soil’ of discourse seems to leach all sorts of horrible stuff.

“In keeping silent about evil, in burying it so deep within us that no sign of it appears on the surface, we are implanting it, and it will rise up a thousand fold in the future. When we neither punish nor reproach evildoers, we are not simply protecting their trivial old age, we are thereby ripping the foundations of justice from beneath new generations.”
― Aleksandr Solzhenitsyn, The Gulag Archipelago 1918-1956

petofi
Guest

One of my saddest days was when the ageing AS went back to Russia and kissed Putin’s ring…

Guest

Old people do strange things some times – like our former chancellor Schröder calling Putin a pure (lupenrein …) democrat …

OT:
If you want to know why I’m angry at olga, just read the latest discussion on politics.hu and the comments from her good friends leto and FUC* – unbelievable!
http://www.politics.hu/20150721/university-student-beaten-up-in-szeged-as-her-boyfriend-was-thought-to-be-immigrant-by-attackers/

And never a critical word from her – so I hope she will leave HS alone!

Rikard
Guest

Re: “Old people do strange things some times – like our former chancellor Schröder calling Putin a pure (lupenrein …) democrat”

I’d thnk Mr. Schroder got enamored of Putin’s move to identify ‘his’ democracy as a ‘sovereign’ one. So that’s where the top Ivan tells a few other Ivans what the hell to do.The ‘democrat’ appellation is no doubt put in there because at least a few Ivans got the chance to ‘participate’.

Have to say the two fellows Vik and Vlad are trying to be very creative on something very very old with their introductions of new adjectives added to that ancient Greek political experiment.

petofi
Guest

Olga is an infomercialist par excellence.

She has seen which way the wind blows a long time ago and acted accordingly. She has about the same integrity as the average of her viewership…or of the country, for that matter.

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