Hungarian Government Implements Radical Decisions Overnight
Hungarian Government Introduces New Tax and Regulations
As of Thursday, the Hungarian government has implemented a number of new regulations, including four major government decisions. These decisions have been published in the latest Hungarian Gazette and will affect economic operators, investments, savings, and millions of people.
According to portfolio.hu, the government’s main goal with these new regulations is to push the public and financial institutions towards investing in government bonds and securities.
One of the most significant changes is the introduction of a new tax. The government will now be imposing a 13 percent social contribution tax on top of the existing 15 percent interest tax on savings. This tax will apply to capital gains on interest accrued after July 1st and on capital gains from newly purchased securities. Although the government previously announced this tax as temporary, it will now be kept until 2024, despite opposition from the European Commission.
The government is also limiting the majority of investments in some investment funds to government securities, which significantly alters the investment rules of institutional investors. Additionally, banks are now required to advertise negative statements about their own products and services to their customers in order to promote a greater financial awareness in Hungary. These advertisements will also include letters demonstrating how much customers could have gained if they had invested in government securities instead of bank deposits.
With these new regulations, the Hungarian government is attempting to redirect the financial sector and the public towards investing in government bonds and securities. However, it remains to be seen how these changes will impact the economy and people’s daily lives in Hungary.
