After seven years, the government would impose a differentiated utility tax, allowing large-scale waterworks in large cities to pay a fraction of the first, while those serving villages could pay a fraction.

With its introduction seven years ago, the utility tax imposed the tax on service providers in a completely undifferentiated way, simply taking into account the length of the pipeline. Under an amendment to the law just introduced, public services serving small settlements will have to pay a third of the current tax, while those operating in large cities can increase the tax by a factor of many.

Due to the simplification of the properties’ utility connection, László Palkovics, the ITM minister, put forward a proposal in late October, essentially simplifying the electricity, gas and water connections in many respects. On Tuesday, Parliament’s Economic Affairs Committee presented a new proposal for amendments to this law. This amendment seeks to differentiate the tax on the water network: up to 6,500 cubic meters per kilometer, the current tax would have to be multiplied by a multiplier of 0.35, and if 9,000 cubic meters pass through this section, the previous rate will be maintained. Of this amount, it would gradually increase, eventually more than 10,000, and in the case of more than 13,000 cubic meters, service providers would have to pay 4 and a half times the tax if the amendment was accepted.

The five state-owned regional waterworks cannot be divided or multiplied by the change, as the state transfers the tax paid from one pocket to another. By the way, according to a bill that has just been presented, they would be referred to Nemzeti Vízművek Zrt., And another gigantic state company would be supervised by the minister without a portfolio responsible for managing national assets. We know from professional circles that the state company can be an escape route for water companies that are already in a weak situation, that they could even enter Nation Waterworks.

The other water companies are mostly owned by municipalities, and this additional burden could be a serious burden for municipalities that bled due to several withdrawals due to the epidemic. Fővárosi Vízművek has told hvg.hu that he would fail a lot with the mod, as

Instead of 729 million HUF, the tax payable would increase to 3,200 million HUF.

In addition to HUF 37 billion in sales revenue, the utility made an after-tax profit of HUF 500 million last year.

But the differentiation of the tax would not be a problem only in Budapest, as Szeged.hu reported that the half a billion profit profit from the municipally owned Szegedi Vízmű Zrt. They would disappear one by one. Zoltán Istókovics, CEO of the company, told the newspaper that the company operates 695 kilometers of potable water pipes and 572 kilometers of sewerage, after which it pays HUF 125 per meter. This year a tax of 158 million HUF was paid, which will be 554 million HUF more if the parliament passes the amendment. Since the benefit of Szegedi Vízmű Zrt. Last year it was 525 million HUF, it is possible that the company will have a loss of a stroke next year. According to the newspaper’s calculations, this could mean a HUF 280 million deduction for the Szeged local government as owner.

The water from the Great Plain on the edge of the ruins might even be useful.

Alföldvíz Zrt., Serving 133 settlements in the Great Plain, has been in deficit for years and also emerged insolvency last summer. This was rejected by the company at the time, but it is not that salary increases are out of the question due to losses, even though the company is very volatile. In 2018, Alföldvíz Zrt was able to record a loss of 500 million guilders, which was mainly attributed to the utility tax and the reduction in general expenses. It is not uncommon for a company operating in a large area to have to “carry” drinking water from 80 to 100 kilometers, often in villages with a few hundred inhabitants, which has so far increased not only unit costs but also fees. tax.

In this way, the new tax system could definitely be a kind of lifeline for the company, another question is whether they could get out of the mess with the late lifeline. This year, his report was not even accepted by the community of owners, as member governments were unwilling or unable to inject tens of millions of guilders into the company’s coffers so that it could continue to operate. We asked the company to what extent adopting the amendment would place less burden on the company and also whether the new tax system would prevent bankruptcy, but we have not yet received an answer to our questions.

We know from professional circles that some water companies would certainly benefit from the new tax scheme, but it is feared that companies that have made at least minimal profits so far and invested in improvements will abandon them and “vegetate” more with the newer revenue. high. like the others.

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According to the trade association, the service could fail

In the case, the Hungarian Association for Water Services wrote a letter to decision-makers, which Szeged.hu obtained. In this, the union warns the amendments that propose that the sector is already at 24 hours, they are on the verge of impossibility anyway, so instead of a bribe that would lead to the collapse of the service, they propose to exempt the providers of the tax payment. :

“In the current situation, the only solution is to exempt the entire water utility sector from paying the utility tax, even if the service providers can reimburse the tax to pay exclusively for operating costs in a controlled and controlled manner. use it for salary increases, maintenance, renovations and replacements. ” .

Hvg.hu also contacted the professional association, but they rejected the interest.



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