Leak: Roadbuilders face retroactive tax

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The Hungarian government is planning to levy a retroactive tax of 15% on the revenue of roadbuilders who acquired more than HUF 100 mln in state grants for roadwork in the past seven years, Hungarian online daily 444.hu reported yesterday.

According to the leaked draft of a bill cited by the portal, the reason given for the tax is that some roadbuilding companies currently have an inevitable advantage over the rest and the market has shown the signs of oligopoly, thus taxes should be paid after the extra profit.

The Government Information Office told the MTI that the rumors about the taxes are untrue, although it did acknowledge a dispute with Brussels that is said to be the impetus behind the proposed tax.

In its report, 444.hu speculates that upcoming EU fines might have inspired this new tax. Brussels and Hungary have been involved in disputes over EU grants, and if Hungary is found to have mishandled the funds, they may be forced to repay 25% of the grants – as much as HUF 60-90 bln, according to reports.

At issue is the allegation that the Hungarian government set unfair requirements for international applicants in roadbuilding tenders, technically excluding them. These requirements were launched in 2007, which would also be the starting year for the taxes, 444.hu added.

The 444.hu news portal commented that the tax hits applicants hardest, even though it was the ones setting tenders who allegedly did wrong. “The government has made a mistake […] yet it intends to make the winners to pay for it” the article says.

Hungarian daily Népszabadság Online speculates that the tax could be targeting former Fidesz party treasurer Lajos Simicska, as the companies being exposed to the proposed tax are Simicska-friendly ones. National Development Minister Miklós Seszták reportedly told Népszadság Online that the action is intended to put an end to the power of "oligarchs".

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