Hungary: Government to expand scope of online register system from end-September

The government plans to expand the scope of the online cash register system from the retail trade to the services sector as of end of September, economy minister Mihaly Varga said at a press conference. As previously announced, the new regulations will enter in force in two stages. The first wave of expansion will include automotive repair shops, vehicle parts dealers, plastic surgery clinics, disco and dancehall operators, laundries and gyms, which will be required to link their cash registers to the tax office. In the second wave, currency exchange offices, passenger transport companies and taxis will be also required to install online registers as of Jan 1, 2017, Varga said.

The government wants to step up its fight against tax evasion and this is the rationale for the measure, Varga explained. He said that the previous government measures like the online cash register system in the retail sector and the electronic road freight control system succeeded in significantly reducing the black economy. The first stage of the online register system in the retail sector involved 217,000 special till machines and generated HUF 150-200bn in revenue in 2014 and HUF 60-90bn in 2015, Varga said. The second stage for the services sector was expected to require 30,000 more online cash registers but Varga did not provide an exact estimate on the additional budget revenue to be generated. The additional revenue will be in the range of tens of billions of revenue, he said, while the state news agency MTI extrapolated that the gains will be around HUF 20-30bn.

The government will support businesses which need to install the new registers but not as much as in the first stage, Varga said. The government provided HUF 50,000 grants to businesses as support in the first stage but Varga said that this is not needed anymore since there was already competition among the register producers.

The government introduced the online register system for the retail sector in 2014 as part of measures aimed at improving tax collection and cutting the share of the black economy. Fiscal Council head Arpad Kovacs earlier said that the improvement of tax compliance is crucial in order to achieve the target for a balanced budget.

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