Viktor Orbán’s unexpected announcement divided mayors

The House Speaker László Parragh’s proposal, which expired in a few weeks, was decided by the government to halve the business tax for small and medium-sized businesses and sole proprietorships as of January 1. We have written in detail how much this measure will harm municipalities, it is not effective at all for companies because it does not help where it really should. We also point out that a selective support system will be introduced (but not out of necessity) in local governments, in the case of the population of settlements, and in the case of individual government evaluation (the latter applies to large cities) . Starting in 2021, municipalities will be even more exposed to government decisions.

The prime minister announced all of this after discussing with city leaders at the county level on Saturday morning.

It follows from the first immediate reaction of the mayors: the government’s plan is basically shared by the leaders of the settlement.

Good for the ruling parties

Károly Szita, President of the Association of Peoples with County Rights (MJVSZ), Mayor of Kaposvár issued a statement Saturday afternoon that the organization supports the government’s new economic protection measures. He also stressed that the government, together with local governments, will create safety for families.

According to Károly Szita, before the announcement, the MJVSZ leadership spoke with Prime Minister Viktor Orbán and several members of the government about the economic effects of the coronavirus epidemic and the possibilities and means of crisis management.

“It is the joint responsibility of the government and local governments to strengthen the economy, keep families strong and make them as few as possible as a result of the coronavirus epidemic,” Károly Szita said in the statement, highlighting that According to him, the measures announced by The Prime Minister are necessary because by protecting the economy, it is possible to achieve a place to work and for parents to support their families. Halving the tax on small and medium-sized companies simultaneously serves to maintain jobs, create new ones, strengthen the economy and protect people, the president of the MJVSZ evaluated. He added that to achieve the goal, the large cities of Hungary will also prepare an epidemiological budget for 2021, which means that everything will be subordinated to strengthening the security of families. “We do all this with the conviction and hope that at the end of the measures, starting in 2022, a strong economic recovery will follow, the benefits of which will also benefit the people living in our settlements,” said Károly Szita.

András Cser-Palkovics, Mayor of Székesfehérvár He also spoke after the announcement on the official Facebook page. Here it is worth remembering that he was the leader of the settlement, who was almost the only one on the government side who strongly opposed László Parragh’s original proposal. He said in November that the chamber’s proposal was “professionally flawed and bad” and would do nothing to help companies in difficulty. “I ask the President of the Chamber, if he makes proposals on these issues, to feel free to pick up the phone and ask for help from those who know the municipalities. And, in his case, they know much, much better than him, the local businesses. “Cser said. -Then Palkovics.

At this point he qualified his opinion. “This year is extraordinary due to the pandemic. Extraordinary times may require extraordinary measures to reactivate the economy, preserve jobs and create new ones. This may also temporarily affect some elements of the tax system.” Although the newly announced state economic protection measures affect the business tax and cause a loss of revenue, we interpret them as covering only the epidemic period and the large taxpayers who pay a significant portion of our city’s revenue. they will provide a reduced tax rate in 2021 to the smallest companies belonging to the SME sector, mainly Hungarian-owned ones, ”argues the mayor of Fehérvár. “In times of crisis, the protection and safety of individuals and families is paramount. The protection of human life, health and employment, which provide a livelihood for families, is paramount and necessarily a priority. We hope May this measure, along with other subsidies and benefits, help achieve the goal of protecting as many jobs as possible, creating as many jobs as possible, and putting the economy back on the path of growth, giving local governments back higher income “, explains the Fidesz politician, that is, he relies on government subsidies and later knows that the future of the city may also depend on it.

“The effects of the decision just announced in the city must first be calmly assessed, the extent of the revenue loss must be accurately calculated and its effects reconsidered and, if necessary, agreed with the ministries.

As a responsible mayor, not shouting, but looking for the possibility of agreements that provide solutions.

We have good hopes on this as we have been able to reach a good agreement with the government on many issues in recent years, which is useful for Székesfehérvár, “he wrote.” I’m glad the possibility of this has already been mentioned in today’s announcement. I am optimistic about the negotiations on these, ”he adds.

László Papp, Mayor of Debrecen According to him, the epidemic can only be controlled if we work together, the government and the municipalities coordinate their actions. “Developments must continue and the economy, jobs and families must be protected. Therefore, in agreement with the government, we will reduce the local tax burden on small and medium-sized businesses. In 2021, we will cut the current tax rate in half. at 1% in Debrecen. the local business tax rate for SMEs, “he said in the video. “Businesses need help, because that’s the only way we have a chance to recover quickly after the crisis,” he argued.

Lajos Kósa, honorary president of the Association of Peoples with Comarcal Rights (MJVSZ), politician from Fidesz, former mayor of Debrecen He said on Saturday, addressing the situation quite unilaterally, that “we are not taking from the cities, but leaving the money to the entrepreneurs and the people.”

Object of opposition mayors

Major Gergely Christmas its opinion rejecting the proposal has already been issued.

Attila Péterffy, non-governmental mayor of Pécs He also commented on the decision. By the way, he was the only opposition politician who attended a trial on Saturday morning with the prime minister and also provided background information on the matter. “After a fictitious reconciliation, Prime Minister Viktor Orbán announced a measure that would make local governments even more economically vulnerable on Saturday afternoon,” he wrote on his official Facebook page.

“As the sole mayor of the opposition, I presented arguments against the 50% reduction in the local business tax in the conciliation, but it was swept away by the government members present. “In fact, I was the only one who voiced strong criticism of the measure, which was still planned at the time and has since been announced,” he said. “To protect the cities from the opposition and the people of Pécs, I said that with this decision, the government, to the detriment of local governments, supports precisely those small and medium-sized companies that do not plan to close due to the epidemic,” he said. I added that if the state still supports this circle of entrepreneurs, it is necessary to compensate local governments for the loss of revenue due to the decision, because only then can they ensure their functionality and fulfill the tasks assigned to them in the control of the epidemic.

“I have also initiated the reduction of the solidarity tax imposed on local governments in order to control epidemiology, which could partially compensate for the loss of local government revenue with the current provision.

Based on the above, the purpose of Saturday’s dictatorship is clear.

“The government is depriving municipalities that have already borne the cost of epidemiological control, citing the pandemic, of a significant part of their local business tax revenues, putting them in an even more vulnerable position. It depends on the political will of the government, for which is completely unpredictable and unacceptable ”, he argued.

“At the same time, in the compensation negotiations, I will do my best to ensure that neither Pécs nor the opposition cities are harmed by the current decision. My goal is that the local government receives fair compensation from the state,” he said the co-chair of the County Cities Association.

György Gémesi, Independent Mayor of Gödöllő On behalf of the Association of Hungarian Local Governments, he responded to the announcement on Facebook. In this post he wrote that

may result in the execution of Hungarian self-government and the inevitable bankruptcy of many Hungarian settlements

Viktor Orbán’s announcement about halving the tax on companies without any substantive consultation. “This announcement has little to do with the economic crisis, much more with the interests of the government’s power,” he said. “Protesting against the mismanagement of the crisis and the impossibility of local governments, the duty of mayors arises from a direct mandate from the citizens,” he wrote.

“The business tax contributes most of the income of the municipalities, of which the municipalities operate public services, from public lighting to waste management, through road maintenance and metropolitan public transport, from where they provide social, child and health assistance. It can deprive millions of Hungarians of the services they deserve, regardless of who they voted for in the municipal elections, “Gémesi listed in counterarguments, assuming the prime minister wants to” compensate “local governments on a political basis.” With This executes self-government, one of the most important values ​​and meanings of regime change, mocks the will of the electorate and takes away the autonomy of the Hungarian settlements, “says the politician.

“If the government continues to use the dire health and economic situation caused by the epidemic to bleed the Hungarian settlements and local governments, then any legal form of protest is justified and necessary for the Hungarian local governments and citizens living in our settlements. “predicts tougher action. György Gémesi.

Featured Image: Prime Minister Viktor Orbán (j) and Károly Szita, President of the MJVSZ, Mayor of Kaposvár (b), before the Prime Minister discusses with the leadership of the Association of County Rights Cities (MJVSZ) In Budapest, at the Carmelite Monastery on December 19, 2020. Source: MTI / Prime Minister’s Press Office / Zoltán Fischer