Hungarian Chamber of Agriculture warns against farmland taxes

Banking

The Hungarian Chamber of Agriculture (NAK) disagreed with a proposed tax on farmland in any form, MTI news agency reported on Friday. A number of local councils plan to impose a tax on farmland following recently adopted amendments to tax legislation that will take effect in January 2015 and allow local municipalities to introduce a new tax on any item not falling under the scope of either central or local taxes.

NAK said it had surveyed Hungary's local municipalities regarding the farmland tax and approximately 50 plan to introduce the tax. NAK said such a tax has raised several concerns. Landowners could pass the tax on to farmland users, in which case farmland users would simultaneously be paying the local business tax directly and the farmland tax indirectly.

Another concern is that the farmland tax would withdraw funds from the farm sector, NAK added in its statement. Hungarian agricultural producers and food industry companies are all members of NAK on a mandatory basis.

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