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At the moment, city leaders are trying to interpret exactly what the bill would mean, taking the example of the Samsung factory in Göd, to take government tax revenue from certain large investments to give it to counties almost invisible until now. However, the intention is clear: much less money may be left in the pockets of some local authorities.
It is a fundamental reorganization of the local government law created at the time of the regime change, the division of tasks and the division of resources may change, so the foundations of the system that was established in 1990 – he commented Jenő Schmidt, the President of the National Association of Local Governments (TÖOSZ) Zsolt Semjén presented to Parliament by the Deputy Prime Minister.
According to the draft, tax revenue from investments costing at least HUF 5 billion can be directed from settlements to the county’s self-government. The recipe was given: In the Göd case in Pest County, a portion of the tax revenue from the opposition-led deal had previously been transferred to the majority Fidesz County Self-Government by government decree. With the deviation from the business tax paid by the Samsung factory, a third of the city’s revenue was lost, and after the expansion of the investment, the amount lost from the city’s coffers may be HUF 10 billion. While Göd’s leadership is awaiting a review of the Constitutional Court’s legislation, the government side will enact a rule that can only be applied as a decree in times of emergency and extend its application to a number of additional investments. In fact, while the decree issued a month ago allowed for the designation of a special economic zone and county government involvement for relatively rare projects of more than $ 100 billion, the $ 5 billion limit applies to almost all major major investments.
Incidentally, this was not the case on Monday, the material sent to TÖOSZ last Friday included a significantly larger quantity, and this was also discussed in the Prime Minister’s Office on Monday. According to Jenő Schmidt, who incidentally is not the mayor of Tab Fidesz-KDNP in Somogy County, they already raised their objections at the time, but to no avail.
Tatabánya could lose up to 6 billion
Exactly what the new investment clause means is still unclear, so settlements where there is a priority investment that is already under construction but has not yet been delivered have to worry, or only about developments and expansions announced or delivered after the entry into force of the law would be subject to redistribution. At the moment, one can only guess which municipalities could be the biggest losers in Semjén’s proposal, but the convergence program sent to Brussels by the Ministry of Finance, which lists the recently announced high-value investments, provides support. This table summarizes developments that exceed 5 billion HUF:
Investments that have already been delivered in the program have also been indicated, so until the details appear, we don’t know if developments on the list are always affected by the Deputy Prime Minister’s proposal. It is so clear that several opposition-led settlements may have something to fear, at least in the list there are 41 municipalities administered by opponents, civil or independent mayors, and 34 administered by the government.
- Mol is building a polio plant in Tiszaújváros with an investment of HUF 396 billion, and a full container city has been built for foreign workers invited for development. The plant has yet to be delivered, so the Socialist-led settlement may also be concerned about its income. If only because the plant environment is the Mol Petrolkémia Zrt. Area, which, if reclassified as a special zone, the settlement’s income may decrease to a fraction.
- One of the biggest losers on the list could be Bezenye in Győr-Moson-Sopron County. An entire village will be built alongside the 1,000-person settlement as part of Kraft AG’s 320 billion agricultural development.
- With an enormous amount of development, 225 billion HUF, it is listed in the 18th. district and airport of Budapest. Semjén’s proposal for the capital’s districts cannot be interpreted, because in Budapest the local government of the capital collects the business tax and shares it with the districts according to the formula, making the part of the city directed by the SE can also calm down.
- Not like the opposition Paul Veres under the leadership of Miskolc, where large investors such as Lufthansa and Bosch arrive.
Mayor of PécsPéterffy Attila He told Inmediate that the burden of the investment would be borne by the city:
Employees use public transport and public roads in Pécs, the factory will have some kind of production anyway, in Hungarian everything will be run by the city of Pécs. We would not see only the benefit of the investment, because it will be seen by the county.
We also asked several settlements and mayors listed in the table about the Semjén proposal. The municipal leaders reported the same thing: the legal interpretation of the proposal is feverish and the best and worst scenarios are being taken into account. As long as it is not possible to know with certainty who is involved, they trust that the government will not remove land from their feet.
Tatabánya, led by the opposition, has five high-value developments. The municipality’s social relations office told us that accurate calculations would require precise knowledge of the details, such as selecting the companies involved according to the value of investments that are already underway or that will begin in the future.
Nor can the immediate environment be interpreted from this point of view: are adjacent areas, classified by location or site, affected, or does the entire industrial park in question fall into this area? Based on all this, the loss of tax revenue can range from 500 million to 6 billion, taking into account the performance of last year, which, of course, can change significantly due to the epidemic, as well as the level and timing of investments.
They added.
Jenő Schmidt sees that the argument that the amendment is necessary to accelerate investments is foreign, since all governments and municipalities are happy with a greater investment, there are no obstacles for them and the division of the commercial tax between municipalities can be resolved with a change in the tax law. could be.
In its interpretation, the proposal does not constitute a withdrawal now, it refers to future investments. However, you have doubts about its effectiveness if it really serves to catch up with lagging regions.
The proposal creates the possibility of being declared a special economic zone, as explained, to allow large investments to be relocated without problems to disadvantaged sites. Although I would like to see investments of more than HUF 5 billion in the less developed parts of southern Transdanubia or in the difficult areas of Zala, these sites will probably not be chosen despite legal simplification.
– he thinks. He added that the situation is complicated by the fact that it is a very difficult situation to interpret when a company operating in an agreement does not enrich the agreement, but rather a virtual municipality that redistributes tax revenues in the form of money or development or not.
The situation of cities with county status can be especially spicy, their residents have no say in the composition of the county assembly, but the county’s autonomous government would still have a share of the tax revenue from their place of residence. From here, the only leap of thought is to imagine that some settlements may even be interested: why support a large company from which they hardly benefit?
I understand the objective, but not the system of tools assigned to it, because it is too difficult and fundamentally changes the system of local government established in 1990, on the basis of which local governments operate today. This must even withstand the test of the constitution.
Jenő Schmidt summarized her impressions.
Featured Image: Bielik István /24.hu
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