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Hungary to levy windfall tax on businesses

Hungarian Prime Minister Viktor Orban said Wednesday his government would bring in a windfall tax on businesses to counter price rises blamed on the war in Ukraine, and to fund extra defence spending. The announcement, which Orban made in a Facebook video, comes a day after he imposed a state of emergency, citing the challenges posed by the war in neighbouring Ukraine. In Wednesday’s statement Orban said the new tax would be levied on “banks, insurers, large retail chains, energy and trading companies, telecommunications companies, and airlines” and that the money raised would go to two special funds. One of these will be for strengthening the army while the other will go towards price caps on energy and water bills. The tax will apply for 2022 and 2023. Orban justified the measure by saying that the war and “sanctions policy in Brussels” had led to “rising prices”, which together with high interest rates “are giving banks and large multinationals extra profit”. Orban did not specify whether the tax would be implemented under the emergency powers. The “details and numbers” of the measure will be announced at a press conference on Thursday, he said.

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