Hungary introduces additional taxes due to budget deficit
2022.12.25 01:40
Hungary introduces additional taxes due to budget deficit
Budrigannews.com – In an effort to close budget gaps, the government of Hungary has imposed a windfall tax on drug manufacturers based on net revenues in 2022 and 2023.
The rate, which was set by a government decree late on Friday, will gradually rise to 8% on net revenues of more than 150 billion forints ($398 million).
In an effort to reduce the government’s deficit, which is anticipated to reach 6.1% of economic output this year, businesses will be required to pay the new tax in both 2022 and 2023 next year.
In the beginning of this year, the nationalist prime minister Viktor Orban imposed significant windfall taxes on a variety of industries, including airlines, energy companies, insurers, and banks.
Investors were shaken by that, and it brought back memories of similar taxes that populist Orban had used to fix the budget when he won power in 2010.
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With inflation expected to rise to 26-27% in the coming months, Orban must control the deficit to avoid an economic recession.
The new tax will be 1% on net revenues below 50 billion forints, 3% on revenues between 50 billion and 150 billion forints, and 8% on net revenues above 150 billion forints, according to the decree. The new tax will have a particularly negative impact on Richter, the largest pharmaceutical company in Hungary.
($1 = 376.5400 forints)
