Hungary defends tax defaulter shame list at European rights court

STRASBOURG, France (CN) — Taxpayers who owe more than $30,000 in taxes are named and shamed by the Hungarian government, but one citizen says this practice violates his right to privacy. 

Lawyers for L.B., as he is referred to in court documents, faced off against Hungarian officials at the European Court of Human Rights on Wednesday, arguing such tax shame lists aren’t an appropriate way to address unpaid taxes and only serve to humiliate citizens. 

“It represents a modern-day scarlet letter,” lawyer Dániel Karsai told the grand chamber of the Strasbourg-based court, which was created in 1959 by the European Convention on Human Rights, a treaty meant to protect the political and civil rights of Europeans. 

L.B., a 55-year-old entrepreneur from the country’s capital Budapest, was listed on the website of Hungary's National Tax and Customs Board in 2016 after a dispute with his business partners left him in arrears. The Hungarian tax office publishes a quarterly list of “major tax defaulters,” anyone who owes the government more than 10 million Hungarian forints ($33,000) in back taxes. A month later, a Hungarian media outlet published an interactive map of tax debtors, including L.B., that included home addresses, information it obtained from the government’s list. 

Hungary’s agent, Zoltán Tallódi, quoted repeatedly from the dictionary Wednesday as he denied that the list shamed anyone.

“You can hardly expect any legal system to make rule breakers feel comfortable with having done something wrong,” he told the 17-judge panel.

Hungary argues that the information offers insight into someone’s financial situation and is needed to protect the country’s economic well-being. 

L.B.’s counsel disagrees, arguing Hungary failed to show the list is useful at preventing tax evasion. Instead, Karsai said, the list “only serves the public’s thirst for sensation.” 

While publicizing the names is bad enough, Karsai said, making public their personal data is even worse. He contends that this system also violates the European Union’s General Data Protection Regulation, although the European Court of Human Rights has no authority to rule on that legislation. 

The a lower chamber of the rights court already ruled in the case earlier this year, finding that Budapest had not violated the 55-year-old business owner’s right to privacy. The court found that L.B. had not suffered any personal repercussions as a result of the publication of the list and the information was in the general interest of the public.

L.B. appealed the decision to the court's grand chamber, which is expected to issue a ruling next year.

Hungary continues to report a list of tax dodgers. The latest version was published in October.

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