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Tobacco firms receive tax incentive for job creation

Telco

The additional contribution tobacco companies are expected to pay into healthcare coffers next year could be reduced by as much as 80% for those companies which contribute to job-creation through investments, according to an amendment approved by Parliament yesterday.

The one-off contribution could be decreased by up to 30% of the total investment made, excluding all grant money.

The amendment would reduce the HUF 11 bln-12 bln in revenue the tax is expected to generate by several hundred million forints, but the government is in support of the amendment, State secretary Gábor Orbán said.

According to the original bill, tobacco companies would be expected to pay a progressive tax based on net revenue – 0.2% for HUF 30 mln to HUF 30 bln, 2.5% for HUF 30 bln to HUF 60 bln, and 4.5% for anything above that. Revenues from the tax would be used exclusively to finance state-funded healthcare.

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