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Business experts concerned by VAT hike

The VAT hike taking effect on July 1 in Hungary will fail to achieve the central revenue boosting effect the government has planned, as it will cut back overall economic performance and will only result in strengthening the shadow economy, the national commerce association (OKSz) said.

The organization warned in a statement that the VAT raise will inevitably end in consumer prices increasing, since neither producers nor retailers have the necessary financial fallbacks needed to “swallow” the additional costs.

The only winners will be those already involved in illegal and untaxed activities and those relying on foreign shoppers, OKSz said. (Gazdasági Rádió)