Hungarian Government Implements Controversial Tax Plan to Boost Budget
The Hungarian government has taken steps to address budget deficits by unveiling an adjustment package that includes significantly increased transaction taxes. This move is expected to generate substantial revenue, but the question remains: who will ultimately bear the cost of these changes?
According to reports by Portfolio, the transaction tax increase is projected to raise almost HUF 100 billion (EUR 254 million) this year and nearly HUF 250 billion (EUR 635 million) next year. While banks are the ones collecting this tax, the exact distribution of the burden is still unclear. However, it is known that corporate customers generally bear the brunt of this tax, with retail customers contributing less than a quarter of the total revenue.
The changes will see an increase in transaction tax rates, with general levies rising from 0.3% to 0.45% and the cap per payment transaction doubling. Cash withdrawals will also face an increase in tax rates. Additionally, transactions involving currency conversion will incur an extra levy starting in October.
The Hungarian government expects these changes to generate significant revenue, with projections reaching over HUF 600 billion (EUR 1.524 million) in 2025. While some may fear that banks will pass on the extra fees to customers, residential customers are protected from fee increases until the end of 2024. However, corporate clients may see some percentage of this fee passed on to them.
The government’s measures are expected to impact Hungary’s largest listed companies significantly, with increased taxes affecting companies like MOL and OTP. Further tax changes, such as the elimination of the air traffic tax and adjustments in excess profit taxes for different industries, have also been announced.
In conclusion, while the Hungarian government’s adjustment package aims to address budget deficits, the ultimate impact of these changes remains to be seen. The question of who will pay the price of these increased transaction taxes lingers, with potential implications for both businesses and consumers in Hungary.
