The Shocking Affair of the Two Cabbage Áfás Számla

"A single death is a tragedy, a million deaths is a statistic," Josef Stalin one said, and boy was Uncle Joe ever right. Try and whip up some outrage over some vast tragedy involving millions of nameless people and no one could care less. But tell the sorry story of one lone victim, and everyone is instantly up in arms. Therefore, today's chronicle of Stalin-like immeasurable calamity begins with the tragic tale of my friend B.M., a respectable and physically unthreatening expectant mother who recently stopped by her local convenience store to run a quick errand and ended up witnessing something so monstrous and senseless that, when she later told me about it, I was at first unsure whether to believe her.

As B.M. tells the story, she entered the store, picked up two bananas and quietly got into line in front of the counter. She was running late for a flight, but didn't fret, as the three or so customers in front of her were also only buying one or two items each. And that's when the unthinkable happened: the person at the head of the line plunked a pair of medium-size red cabbages down on the counter and then told the cashier that he wanted a VAT receipt for the two stink-making cultivars, bringing everything to a screeching halt, and sending B.M. out into the street, minus the bananas that she had been counting on to nourish her unborn child.

If you've lived in Hungary long enough, you've probably experienced something like this, and maybe even worse. I've heard stories of time standing still as triplicate paperwork was drawn up for milk, cigs and a miniature Túró Rudi bar, or a medium-size parasztkolbász with a side of Crepto toilet paper. But for now I will heed Joseph Vissarionovich's iron dictum, and stick to the Affair of the Two Red Cabbage Áfás számla.

It takes special insight to get under the Hungarian tax system's numerous layers of complexity

From what I understand, no one was killed or mortally wounded during A két áfás számlás vöröskáposzta esete. But the victims include many more than B.M. Also persecuted were the poor schlubs who had to wait while the tax documentation for the cabbages was drawn up, and whoever had to copy down all the relevant company and cabbage information, and put it into the right place. The owner of the corner store also can't be too happy about having to pay cashiers to fill out complex forms for every other tomato or parsnip, and to pay an accountant to do whatever accountants do with all that paper. Even the lunk who asked for the receipt was probably an injured party, as he was likely doing what his own boss told him to do, or had to come up with as many random invoices as possible just to get paid. And, of course, if you pay taxes in Hungary (or anywhere in Europe; Hungary gets mountains of EU money) you are also among the directly affected, because a decent chunk of your tax forints goes towards the administration of that two-cabbage receipt, which will still be around and being passed back and forth months or years after the two cabbages themselves were cooked, eaten and flushed down the Danube.

But if you really want an example of how silly Hungary's tax system has become, just consider the tax situation of the country's head cabbage, Prime Minister Ferenc Gyurcsány. During his recent testimony to the parliamentary committee investigating the source of his riches, Gyurcsány was forced to concede that his own home was the product of a three-ring paper-shuffling circus.

The PM admitted that his home, which from what I can tell is in his wife's name rather than his, had for a time been actually controlled by his family's company, Fittelina Kft, which in turn had paid for construction of the villa's swimming pool, elevator and some nicely landscaped outdoor seating areas. (It is unclear whether Gyurcsány's company hired the Gyurcsán Uszodatechnika swmimming pool company to build the Gyurcsány swimming pool.) When the rights to the villa reverted to his wife and mother-in-law, the improvements remained the property of another of his companies, meaning he now has to pay rent to use them - including "several million" forints to splash about in his own house pool. Naturally, Gyurcsány stoutly defended the entire crazy scheme by insisting that the VAT for the pool, elevator and pleasure garden had never been reclaimed. But if true, this would seem to make the whole crazy scheme crazier still, because it would mean that there was no real reason for the whole rigmarole in the first place.

Actually, what's so totally crazy about this is not that Gyurcsány ended up having to pay rent to himself for using different parts of his own house. ("Honey, can you mark down on the usage sheet that I took the lift twice to the garage, swam three laps and took a nap in the pleasure garden? And where the hell are my cabbage receipts?") It's that he doesn't seem to think it's crazy, or at least isn't willing to lift a finger to help stop the madness.

Unfortunately, I don't think it's a lack of imagination or seriousness that keeps Gyurcsány and Hungary's other alleged leaders from stopping this madness. Rather, it's that the current system of receipt-trading and tax wangling is a primary source of wealth and power for a vast array of powerful vested interests, including all those bald guys in black BMWs you probably think break legs for a living. Remember, if you can find a way to illegitimately reclaim VAT, that 25% (soon to be 20%) top ÁFA rate is a gift, not a burden. Meanwhile, every two-cabbage Áfás számla means a bit of work for those in the paper-pushing business, most notably the roughly one-quarter of Hungarian workers employed in state administration. Get rid of the madness, and these people would be forced to get real jobs, offering real products or services to real customers, which for them would be a fate worse than death.

In eerily related news, last week it was reported that the National Tax Office (APEH) will introduce a new award for the country's most scrupulous taxpayers. For the past decade, the APEH has been keeping a "dishonor roll" of the country's biggest tax cheats. Individuals made the list if they had tax arrears of more than Ft 10 million in, while enterprises got on if they accumulated Ft 100 million in unpaid taxes. Now, thanks to a change in the country's tax law, enterprises can apply for the status of minősített adózó ("certified taxpayer") if they have been operating for at least three years before submitting the request and have done everything the Magyar taxman asks.

Rewarding scrupulous taxpayers may seem like a great idea, especially in a country like Hungary, where so many spend so much time and effort dodging taxes. But when a country has a tax code as silly as Hungary's, those companies that fully comply with it are likely to be either silly themselves, or bankrupt. Even the straight-laced daily Világgazdaság couldn't resist cracking that it would be better described as an award for the "most pedantic" taxpayers, meaning those that excel at the trivia of paper-pushing rather than creating value or serving their customers. Unfortunately, it's hard to see it any other way, because it's all too easy to picture an APEH official picking up a receipt, running down the hall to their supervisor, and shouting "Hey, Józsi, I think I found the perfect taxpayer ever - they are even providing receipts for individual heads of red cabbage!"