Phantom art groups gained hundreds of millions from tax allowance

Not only sports federations or teams can be granted by the tax allowance system (TAO): a law-amendment allowed companies to support ’spectacular team sports’ from their charges instead of paying it to the state.  According to the regulations, performing-art organisations can be granted as well and as Atlatszo.hu’s investigation has shown several companies are seem to be granted with hundreds of millions for no work in the field.

Theatres and art groups were granted with a massive 11,6 billion HUF in 2012, which is 4 billion less, than the amount of TAO grants the football branch received last year. Art-TAO grants can be used in the 80% amount of each group’s yearly ticket revenues maximum. This made it possible for almost unknown art groups to perform in exotic countries with very high travel and accommodation expenses. They also provided vouchers showing tens of millions of ticket revenues, which were – according to rumours – made in Azerbaijan, the Gulf-countries and in Mexico. The government restricted the compensation to be valid only in the European Economic Area, in order to avoid further misuse but the system still has its leaks.

According to the visitor-centric supporting system, art-TAO favours big and commercial theatres, such as the Budapest Operetta and Musical Theatre which as the big winner of 2012 received 1 billion HUF from tax-allowance. Smaller and independent groups seem to be unable to benefit from the system; they can only get subsidies from grants, as their funding was cleared from the state budget years ago. Art-TAO is also an easy way for tax-evasion, as it is controlled by the Performing-Art Office, instead of the Tax Authorities. This office has only 7 employees to control more than 200 organizations and an amount of public money higher than 11 billion HUF. We found a travelling theatre with no regular company which dealt with more public money than big and traditional theatres. Many more art groups were found in the lists with no more matches and mentions on the internet than the company databases. These were also dealing with more than hundreds of millions of public money.

The original article was published on 29/08/2013, in Hungarian