New Taxes Approved in Hungary
November 20, 2014 Taxation in Hungary
BUDAPEST – Hungary will implement a series of new tax hikes on alcohol, shampoo, soap, and large foreign firms.
On November 18th the government of Hungary announced that a series of new taxes and tax hikes will be instated, despite the fact that a significant number taxpayers publically protested the changes during a widespread “public outrage day”.
Among the new tax rate hikes is a 10 percent increase to the top rate of the controversial advertising tax, increasing from 40 percent to 50 percent.
Other controversial measures include the extension of the current “chip tax” on unhealthy products to include alcohol, the extension of environmental fees to include shampoos, soaps and other healthcare products, and a hike to the rate of the so-called “Tesco fee” on foreign-owned locally-operating firms.
According to the government, the new tax measures are an extension of the current focus on reducing income taxes, and to shifting tax burdens towards consumption.
However, despite the government’s claims, some experts have come forward to suggest that the taxes will distort market competition against foreign businesses operating in the country.
The new tax changes are not the first set of controversial changes to be put forward by the government, as only last month the government proposed the enactment of a tax on internet use, although it was dropped within weeks after overwhelming public outcry.