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On December 19, Viktor Orbán announced that the business tax on SMEs and sole proprietors would be cut in half starting in January, which is the most important revenue for local governments.
Light and interaction
The decorative lighting was turned off centrally at 7pm in Budapest. Parliament also went dark.
25 municipalities joined the protest of the Association of Free Cities.
Among other things:
- Pécs,
- Szeged,
- Szombathely,
- Érd, Budaörs,
- Siófok and Gödöllő.
They wrote that they must act together against a “government decision that evokes dark times.”
Nationwide, 3,096 settlements have a combined annual business tax revenue of HUF 800 billion, so the stakes are not small. These revenues are used to finance public lighting, public transport, garbage collection, maintenance of roads and green spaces, social subsidies and support for theaters, cultural and sports activities at the local level.
According to László Parragh, this is of great help for companies.
Economic protection action plan
Viktor Orbán announced the reduction of the business tax among the economic protection measures. The prime minister justified the decision by saying that small, medium and individual companies are the most vulnerable and provide the largest number of jobs in the country. The municipalities will thus lose a large amount, to alleviate this, announced the Prime Minister, settlements with less than 25,000 people will receive financial support and the situation of the largest municipalities will be reviewed individually. According to the mayor of Gödöllő, György Gémesi, calling the reduction in the management of the corporate fiscal crisis is vile cynicism.
Gergely Gulyás said on Tuesday they will leave about 150 billion guilders in businesses by cutting the business tax in half. According to the minister in charge of the Prime Minister’s Office, Budapest’s tax revenue will return to the level of 2017, when small, medium and individual companies paid HUF 294 billion to the capital’s coffers.
The price of the Chain Bridge
Gergely Karácsony, the mayor of Budapest, reacted on Saturday that Viktor Orbán executed the local government with this decision. According to the mayor, the type of tax is the most important basis for public services, which are in danger by halving the type of tax, while in the case of companies it already seems to be low cost, for them this step does not mean significant help. The politician wrote that with this decision, local governments would be deprived of the price of the renovation of the Chain Bridge (26.8 billion HUF), with which they would pay for public lighting, public cleaning and maintenance of green spaces.
Gergely Gulyás, for his part, sees partisan political debates between the government and the leadership of the capital. The chancellor said he did not believe conservative Christian politicians were more talented than Christmas. According to him, the reorganization of the budget would solve the financial problems.
With the halving of the business tax, settlements will drop from about 800 billion guilders.
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