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Despite Official Rhetoric, Ordinary Hungarians Will End Up Paying More in Taxes

The government is trying to convince its supporters that the public will not be affected by adjustments to the budget, but an excellent refutation of this is Ryanair’s decision to pass on the new airline tax to its customers, even those who have already paid for their tickets.

But corporate reactions aren’t necessary to see the false promise in government rhetoric, as it is enough just to look at the budget proposal now before Parliament.

The recently-announced budget adjustments aim for an annual savings of 2 trillion Ft. (US $5.2 billion) this year and next, with 800-900 billion Ft. ($2.1-2.3 billion) expected to come from new special taxes and tax increases, and 1.0-1.2 trillion Ft. ($2.6-3.1 billion) to derive from spending cuts.

Since spending cuts have been given more weight than austerity measures in this formulation, the government wants to send a message to markets that it is cutting more of its expenditures than the amount it is extracting from companies.

However, a close look at the 2023 budget proposal tells a more nuanced picture. The new special taxes totaling 900 billion Ft. actually represent only a small part of the increase in tax revenue, as the government is counting on an additional 4.6 trillion Ft. ($11.95 billion) from other sources.

While the government expects an extra 1.056 billion Ft. ($2.748 bilion) to come from corporate taxes, it will also collect 3.6 trillion Ft. ($9.37 billion) more from household and consumption taxes next year, which means that the public will shoulder a larger burden of the budget adjustment measures. [Népszava]

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