About 1,000 protesters blocked a bridge in central Budapest on Tuesday as parliament debated a motion by Prime Minister Viktor Orban’s government that would raise the tax rate for hundreds of thousands of small businesses.
Protesters initially gathered in a main square outside the parliament before marching to a nearby bridge over the Danube River, blocking traffic in both directions between the two sides of Budapest amid a heavy police presence.
The nationalist Orban is facing his toughest challenge since taking power in 2010, with inflation at the highest level in two decades, record lows forint in plumbing and EU funds in limbo amid a dispute over democratic standards.
With the bridge blocked for about an hour, choking on one of Budapest’s main traffic arteries, protesters chanting “withdraw” faced police officers ordering them out in the first major display of unrest since Orban was re-elected in April.
“It may not be worth continuing (with the higher tax rate),” said Katalin Karolyi, 52, who runs a small business that advises a company on food issues.
“It will jeopardize my livelihood, the livelihood of my entire family.”
Orban’s government introduced the amendments to parliament on Monday, drastically reducing eligibility for the simplified tax regime, which many small businesses have opted for due to poor management and the low tax rate it offered.
However, the government says the system has been abused by some companies, forcing workers into the scheme to reduce their own costs, facilitating a form of undercover employment.
The new rules are due to take effect in September, pending parliamentary approval. The tax was supposed to raise 237 billion forints ($572 million) this year.
Laszlo Zara, a tax adviser, said the changes affecting an estimated 400,000 to 500,000 small businesses could take the overwhelming majority out of the revised scheme, with about 50,000 people remaining eligible.
“This is clearly a tax increase, however you try to frame it, a very large tax increase,” he said.
“This will be inflationary because (small businesses) will not be able to reach their previous income levels, forcing them to raise prices, also driving up inflation.”
Source: CNN Brasil
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