Hungarian Prime Minister Viktor Orban has used the emergency powers to issue decrees on a sweeping series of emergency taxes and cut spending of about $ 6.1 billion this year and next.
The measures, which will hit sectors from the banking sector to energy and from airlines to telecommunications, underscore the extent of the fiscal imbalance that has frightened investors, as the European Union has blocked funding for billions of euros due to concerns. for starters.
The government said last month that cuts and public spending savings would make up 60% of the budget consolidation, while emergency tax revenues would make up 40%.
Expenditure cuts include a 10% reduction in central government spending in 2022 and 2023, to 581 billion forints ($ 1.6 billion) and 500 billion forints respectively. Public investment of 1.15 trillion forints will be suspended for this year and next year, while rich subsidies on utility prices will be limited to households, according to decrees issued Sunday.
Extraordinary taxes will be paid according to the following:
-Banks will pay a contribution of 10% on net income in 2022 and 8% in 2023 in two equal installments- in 2022, the first installment must be paid by October 10, the second by December 10.
– The oil companies that import Russian crude – reference to the refinery company Mol Nyrt. which was granted an EU exemption from the bloc’s oil embargo – will pay a 25% tax on the price difference between Russian crude and Brent. The tax must be paid by July 1 for 2022.
-Telecommunications and retail companies will pay progressive tax based on net sales, which increases to 7% for telecommunications companies’ revenues and 4.1% for retail sales for revenues of more than 100 billion forints
Airlines must pay a departure fee of 3,900 forints, or about 10 euros, for those flying within the EU and most of Europe. For those traveling farther, the departure fee is 9,750 forints.
-Finance and excise taxes, as well as a splash of other smaller contributions to the economy, will be increased or extended as well, according to the decree.
-Hungarian assets were hit last week as confusion over the central bank’s monetary policy, contingency tax plans and the government’s prospect of securing critical EU funds shook markets, sending the forint close to low. record against the euro.
Source: Capital
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