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Tag: extra-profit tax

Spat Between Ryanair and Hungarian Gov’t Descends into Childish Name-Calling

After several days of calling Minister for Economic Development Márton Nagy an “idiot,” Ryanair CEO Michael O’Leary went a step further by comparing Nagy and Minister Gergely Gulyás, the head of the Prime Minister’s Office, to the lead characters in the 1994 film “Dumb and Dumber.”

As O’Leary told Euronews:

These two Hungarian ministers are like that Jim Carrey movie, “Dumb and Dumber,” if they think people will happily pay the extra tax and choose a more expensive airline from one day to another.

The low-cost airline got riled up after Viktor Orbán announced on May 25 that the government would be imposing an “extra-profit tax” on certain industries, including airlines. The state will levy an extra 3,900 Ft. (US $10.27) per ticket for European destinations, and 9,750 Ft. ($25.68) for destinations outside of the continent.

Ryanair announced it would pass on this new tax burden to passengers, which the government has protested, launching a consumer protection investigation over the matter.

Not to be outdone, Fidesz MEP Tamás Deutsch continued the name-calling on Thursday. Speaking to HírTV, the 55-year-old man expressed his view that the Ryanair CEO was a “male appendage.”

[Telex, HírTV]

Ryanair Now Asking Passengers to Protest Directly to Hungarian Government Over “Extra-Profit” Tax

Dear Passenger,

The Hungarian Govt. has recently imposed a baseless and unjustified “extra profits” tax at short notice, on the airline sector suffering record losses, so we need your support, to have this idiotic and unfair tax on our passengers scrapped.

read an email that Ryanair sent to its passengers on Wednesday, urging them to write a letter of protest to Economic Development Minister Márton Nagy over the “extra-profit” tax, rtl.hu has learned.

The new tax has caused quite a bit of back and forth between the airline and the Hungarian government, and the company’s CEO, Michael O’Leary, has repeatedly called Nagy an “idiot.”

A yellow button prominently featured at the bottom of Ryanair’s email, when clicked on, creates a pre-written message that their system will then email to the Prime Minister’s Cabinet Office at kommunikacio@mk.gov.hu.

The pre-written English-language email, which is personally addressed to Minister Nagy, demands the immediate abolition of the tax, which the email claims will increase air travel expenses for Hungarian passengers and their families, and damage Hungary’s image and reputation in the European Union.

Ryanair announced that because of the tax, it would be adding an extra 3,900 Ft. (US $10.41) for all flights departing after July 1, even for those who had already paid for their tickets.

The government has launched a consumer protection investigation against Ryanair over the matter. [Magyar Hang]

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]