The government prohibits local governments from increasing local and municipal taxes in 2021, introducing a new tax or abolishing existing tax breaks, the Finance Ministry said Tuesday night.

The local and settlement tax rate cannot be increased next year, according to the government decree published in the Magyar Közlöny states.

Tax breaks and tax breaks also cannot be limited or reduced, as they must also be provided in 2021. Municipalities will also not be able to introduce a new municipal tax next year, the government has prescribed.

According to the Finance Ministry, the decree published today in the Hungarian Gazette was necessary because “it guarantees the protection of the population, families and companies.”

Virtually all tax revenue has been taken away from local governments in recent years, just as their revenue has been significantly reduced during the coronavirus crisis. In this situation came the idea of ​​László Parragh, director of the Hungarian Chamber of Commerce and Industry, that companies should not have to pay business tax, which is the last great income of local governments, for a year. (He later suggested that no municipal tax be paid for one year.) Regardless of party affiliation, all municipal leaders responded that if the idea materialized, the amount thus withdrawn would have to be reimbursed from the central budget, otherwise they would not be able to fulfill their basic functions. local authorities.

The fact that the government is now speaking so harshly about local tax issues further reduces the room for maneuver for local governments.



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