Measuring tax administrative costs and the corresponding business attitudes in Hungary

As part of government efforts to reduce the administrative burden of enterprises, in 2019 the Ministry of Finance announced the plan to eliminate 20 of the smaller tax forms by 2022 in Hungary.

In order to take the next reform steps, a specific analysis is required as any tax policy reform should be planned on a data-driven, evidence-based approach. This assessment project has two main components: firstly, the Budapest Institute in partnership with the Ernst & Young assesses the tax compliance costs (with a special focus on VAT, CIP and employment-related information obligations) levied on Hungarian companies. The Standard Cost-model assessment is based on a representative survey of Hungarian enterprises. Secondly, the Ernst & Young runs the performance measurement of the National Tax and Customs Administration (NTCA).

As a result, the project delivered an assessment study and specific policy recommendations to optimize tax administration procedures while it also contributed to the capacity building of the National Tax and Customs Administration (NTCA).

The results of the research are available in English on the website of the Ministry of Finance.

The Budapest Institute was contracted by Ernst and Young to carry out the tax compliance cost measurement as part of the larger project proposal that won a tender of the European Commission.