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The groups support greater contributions from wealthier taxpayers but question whether the current proposal would achieve that goal fairly and efficiently.
The draft legislation was released for public consultation on Oct. 6. The organizations said the short consultation period had made it difficult to discuss and reconcile professional positions on a measure involving complex implementation challenges.
Their joint statement raises concerns about administrative burdens, the treatment of illiquid assets and potential long-term economic and social consequences. Most participating organizations are also submitting separate proposals to the government.
The groups said discussions had highlighted alternatives, including withholding taxes and measures to increase corporate income tax revenue. They questioned the proposed wealth tax’s long-term sustainability, citing international experience.
The signatories urged lawmakers to recognize funds reinvested in the economy when calculating wealth tax liabilities.
They proposed allowing some degree of tax deduction for investment, energy efficiency and digitalization projects, R&D, employee training and donations to public-benefit nonprofit organizations.
Such provisions would help mitigate potential adverse effects and demonstrate the government’s commitment to a market-oriented approach, supporting transparent businesses capable of continued development, the statement said.
The organizations also proposed an additional, lower tax rate of 0.3%-0.5% for wealth between HUF 1 bln and HUF 5 bln, a category they said typically affects small-business owners. That rate could potentially increase annually.
The statement called for careful treatment of the relationship between liquid resources and illiquid assets.
Economic developments over the past 35 years have left thousands of companies with relatively high equity represented by illiquid assets with limited income-generating capacity, the organizations said.
Having experts revalue those assets would itself require considerable time and expense. Reflecting the resulting changes in company accounts could also significantly worsen banks’ assessments of businesses and reduce their access to credit, they warned.
The signatories separately requested attention to listed companies, businesses preparing to list and young, growing companies.
Under the proposed rules, the cost of being listed could become prohibitive for companies with an initially low free float, they said. Startup founders could also face difficult circumstances following substantial external capital increases that do not generate income for them.
The organizations said the limited time available meant further issues with broader implications were likely to emerge beyond those already identified.
They called on the government to ensure fair, constructive treatment of legitimate entrepreneurs and individuals and to remain open to regulatory changes addressing unforeseen problems as implementation proceeds.
The statement’s supporters span construction, family businesses, food manufacturing, technology, hospitality, retail and other sectors. They include the Hungarian Chamber of Commerce and Industry (MKIK), the Confederation of Hungarian Employers and Industrialists (MGYOSZ), the Joint Venture Association (JVSZ) and the National Association of Entrepreneurs and Employers (VOSZ).
The other signatories are ÉVOSZ, FBN-H, FÉSZ, FIVOSZ, IVSZ, MAPI, MSVK, MSZÉSZ, MVÜK and OKSZ.
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