Over the past six years, corporations have directed an astronomical HUF 415 billion (USD 1.44 billion) to sporting associations and sports clubs via the government’s controversial TAO program, which allows businesses to make tax-deductible contributions to sports in lieu of contributing those funds to the state budget via taxes, according to news site 24.hu. The amount of funding for sports made available through this scheme has increased every year since its inception: last year alone, sports organizations received some HUF 99 billion (USD 344 million) through TAO.
The money has been allocated to five spectator sports – soccer, handball, basketball, water polo, and ice hockey – since the government introduced the TAO corporate income tax allocation scheme in 2011. Half of these funds ended up being directed at soccer, while the second largest chunk went to handball. Records show that Fidesz’s favorite clubs are among the most favored beneficiaries.
In the first three years of the program, soccer received three times more funding than handball, the second most popular sport. Total contributions to date are as follows:
- Soccer: HUF 191.1 billion,
- Handball: HUF 92 billion,
- Basketball: 57.4 billion,
- Water polo: HUF 46.1 billion,
- Ice hockey: HUF 28.3 billion.
The tax-deductible funds directed to sports organizations rather than being paid as taxes leave a major gap in state coffers. According to 24.hu, the past six years’ TAO contributions are approximately equivalent to what is paid annually to every teacher in Hungary. The funds amount to around HUF 100 billion (USD 347 million) less than what is spent on subsidies for families, and to about four years worth of funding for local doctors.
2016 saw the most generous contributions yet via TAO: in 2011, the program’s first year, TAO brought in HUF 38.6 billion. In 2016, HUF 99.2 billion (USD 344.7 million) went straight from corporations to sports organizations.
About 20 percent of TAO funds – HUF 85.5 billion – went to sports associations, while the remaining 80 percent were directed straight to sports clubs. Of the HUF 135.5 billion that went to more than one thousand Hungarian soccer clubs over the past six years, almost 10 percent (HUF 12.5 billion) went straight to Prime Minister Viktor Orbán’s club in Felcsút.
Similar trends can be seen with soccer clubs affiliated with other ranking government officials, including tax authority chief András Tállai’s club in Mezőkövesd and Minister of National Development Miklós Seszták’s soccer club in Kisvárda.
According to 24.hu, “the most serious problem with the TAO scheme is that we cannot know which companies feel as though it is their responsibility to [make these contributions], and which ones do it to increase the likelihood of being awarded public procurement tenders if these funds are allocated to clubs favored by those in power.”