Hungarian government puts up a huge roadblock, hinders local automotive industry

As it is now customary in Hungary, the government inacted a law without consulting key stakeholders who are deeply concerned now.

A new tool fighting tax fraud was introduced on 1 January. It is called the Electronic Public Road Trade Control System (EKÁER). In an interview with autopro.hu, a Hungarian automotive industry website Thomas Faustmann, Managing Director of Audi Hungária Motor Kft said: "I think this is pointless... It would have been better, had the government consulted us first... To comply with new regulations we would need to employ 20 people in three shifts - doing just administration work... [If the local suppliers are not competitive] there are other countries near Hungary who are eagerly awaiting orders..."

Previously, László Urbán, deputy Managing Director of Magyar Suzuki Zrt said in an interview with autopro.hu that the Esztergom plant may be forced to halt production on 1 February if they can't find a way to comply with new regulations.

But what happened?
Taxpayers have to notify the tax authority electronically in the EKÁER system of any product purchases or other imports transported to Hungary from European Union member states by road using a vehicle subject to the road toll, product sales or other exports from Hungary to the European Union, and any first-tinme taxable supplies in Hungary that are not destined for end-users. This notification obligation applies to all activities involving road transportation. From 1 February heavy fines are imposed on those who fail to comply with the new regulations.

However if you operate a just-in-time plant and you need to enter all incoming products into a database, that slows down the process. Additionally the database is not so perfect, so trade secrets have already been accidentally leaked.

Government officials did not react to criticism yet.