FinMin: Hungary should consider windfall profit tax on energy companies

Banking

Finance Minister János Veres on Friday said it would be worthwhile for Hungary to consider introducing a “Robin Hood” tax on energy companies’ windfall profits from record oil prices and use the revenue for social compensation -- first of all to offset higher district heating prices.

A few hundred Hungarian energy companies would pay the tax, though the size of the tax should be determined in a way that that does not cause companies to cut back on investments or raise prices, and that does not distort the market. The government expects Brussels to reply before the start of the summer holiday to a request to lower excise tax levels to lessen the effect of high vehicle fuel prices. Veres said he saw not chance for a VAT cut to compensate for higher food prices.

Fuel company MOL Nyrt has for years been paying a mining annuity much higher than the European average after gas exploration, which means that the Robin Hood mentality had entered Hungary earlier than Europe, Dóra Somlyai, MOL’s PR head told the wire agency MTI. In 2007, MOL paid about Ft 100 billion in mining annuity, of which Ft 66 billion went to the gas price compensation fund. (MTI-Econews, Gazdasági Rádió)

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