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“The municipalities spend more than 80 percent of the business tax on the operation of state and municipal tasks. It is important to note that this figure is for 2020, but it could reach 100 percent next year due to lower corporate tax collection due to the fall in economic performance this year. In the event that if this resource is overlooked, or at least hit very hard, municipal tasks will be ineffective. This is so simple, the Prime Minister knows it exactly, since he has all the relevant information from the Ministry of Finance and the Ministry of the Interior ”, replied György Gémesi, President of the Association of Hungarian Local Governments, László Parragh, President of the Hungarian Chamber of Commerce and Industry.
The MKIK president met with Prime Minister Viktor Orbán and Minister Antal Rogán on Sunday. At the meeting, László Parragh proposed to the Prime Minister to suspend the business tax for one year, in addition to halving the business income tax.
Lost money must be recovered
György Gémesi told us that the business tax covers operating costs, and operating costs mean energy, wages, and material costs.
The tax rate is used for kindergartens, kindergartens and the maintenance of the operation of municipal institutions, if this falls, this money must be replaced.
Said the president of the association. According to him, it would be much easier to provide direct support from the economic development fund that has been collected and which also includes the car tax paid by the municipalities.
After the meeting, László Parragh told the press that he was aware that this proposal would have a sensible effect on local governments, but that he did not see any other possibility at present for companies to be sustainable during perhaps the most difficult period of the epidemic.
György Gémesi said that
the president of the MKIK is unaware of several things related to the functioning of the local government, and the prime minister has all the information through the ministries, he knows exactly what the consequences of a certain decision may be.
László Parragh expects harsh criticism, but in the case of Budapest he believes that austerity measures would be necessary. The president of MKIK indicated that Viktor Orbán did not reject the proposals, the details of which will be worked out in a short time with the involvement of the camera network.
We looked at the Mayor’s Office for what they would say about the proposals. To our interest, they said that their official position is what Deputy Mayor Kata Tüttő posted yesterday on her Facebook page, and they do not want to add more at the moment.
If there is no ipa, nothing?
Kütt Tüttő wrote on the largest community site that “they have been tapping into municipal revenues all year, but now they are taking a big breather and losing it all”.
The deputy mayor recalled that this – the local business tax – is the only tax revenue of the Metropolitan Municipality, from which the BKV operates.
If there is no business tax, there is no public transportation. If there is no public transport, no school, and the majority will not be able to work, no one really, because public lighting is also paid by the city with business tax. This will be of great help to businesses.
Tüttő wrote on Facebook.
“They have been taking advantage of the revenues of the municipalities throughout the year, during the epidemic, but now they are taking a deep breath and losing the …
Posted by Budapest City Hall – Sunday, November 8, 2020
In the annual budget of the municipalities, the local business tax is a significant item. The type of tax is called government revenue. In 2018, for example, more than 30 percent of total municipal revenue came from public revenue, 98 percent of which was taxes.
In Hungary, 90 percent of local governments have introduced a local business tax and more than 50 percent have imposed a maximum of two percent of the legal burden.
The amount of the tax is indicated in the local tax decree issued by the municipality. The local government may grant a tax exemption or tax allowance as specified by law, for example in the case of an investment or for a medical practice.
If we look at Budapest, the district government and the capital city government have the right to introduce the building and land tax, the municipal municipal tax and the tourist tax.
Top image: Prime Minister Viktor Orbán (j2) will meet with László Parragh, president of the Hungarian Chamber of Commerce and Industry (MKIK) (b) at the Carmelite Monastery on November 8, 2020. On the left, Antal Rogán, Minister in charge of the Prime Minister’s Office (b2), on the right, Márton Nagy, Acting Prime Minister and Economic Policy Advisor. MTI / Prime Minister’s Press Office / Zoltán Fischer
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