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EU unlikely to approve Hungary plan to eliminate of distillation tax

The European Commission is unlikely to approve the Fidesz-led government's proposed termination of the excise tax currently imposed on the distillation of pálinka, Hungary's eau de vie, the business daily Napi Gazdaság wrote.

The legalization of private distilling of pálinka, including the elimination of the related excise tax is part of the government's 29-point economic action-plan that Prime Minister Viktor Orbán presented to parliament on June 8.

The European Commission must approve all modifications of excise taxes levied in the organization's member states. The daily noted that the European Union was reluctant to allow Hungary to maintain the network of designated contract distilleries when the country joined the organization in 2004 on the premise that it represented undue influence on the market.

MTI reported on June 9 that Hungary's customs and excise tax office VPOP estimates that the proposed legalization of private pálinka distillation would reduce tax revenue by around HUF 8 billion (€28.73 million). (MTI – Econews)