“A defense fund and a ‘utility protection’ fund are being set up, and we will require banks and insurance companies, large retail chains, energy and trading companies, telecommunications companies, and airlines to pay a large portion of their extra profits into these two funds,” announced Viktor Orbán in a Facebook video posted on Wednesday evening. The special tax will be levied for two years, 2022 and 2023.
We ask and expect those who make an extra profit in this war to help people and contribute to the country’s defense expenses.
-said the Prime Minister, who added that the new measure was necessary due to the protracted war between Russia and Ukraine, but also because “the sanctions policy in Brussels is not improving,” and the two together are causing drastic price increases.
Orbán promised details on the fight against multinational companies and banks at tomorrow’s Government Information briefing.
The special taxes will presumably be used to offset the hole in the budget caused by the utility price cut policy. It is not yet clear which sector they want to make pay, nor how much, but it may be as much as hundreds of billions of forints per sector, or 1 trillion Ft. (US $2.72 billion) in total.
Regarding the defense fund, NATO members, including Hungary, pledged at their summit in Brussels on March 24 to step up their commitments towards improving their defense capabilities, and allocate at least 2% of their annual GDP to military spending. In 2021, Hungary only spent 1.6% of its GDP on defense. [Népszava]