Budapest could get HUF 40-45bn for BKV from higher local business tax

Banking

An increase in the local business tax would raise revenue for the capital by HUF 40bn-45bn, Budapest mayor Istvan Tarlos said at a press conference on Monday.

Speaking after an amendment was submitted to Parliament that would raise the local business tax from 2% to 2.5%, Mr Tarlos said the city could use the extra revenue to finance its public transport company BKV.

If troubled BKV were to go bust, it would cause the Hungarian economy losses of HUF 14bn a day, not counting the company’s HUF 70bn stock of debt, he added.

Mr Tarlos said he had agreed with Prime Minister Viktor Orban that financing for BKV could only come from such sources as an increased local business tax.

The local business tax increase would become effective in February, he said. It still isn’t certain that it would have to be in place for the long term, but it would definitely be necessary for several years, he added.

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.

Support the BBJ

Finance