Budapest to Withhold Part of Central Gov't 'Solidarity' Tax
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Budapest Mayor Gergely Karácsony on Wednesday announced the city will withhold part of the "solidarity contribution" on local business tax revenue it must pay to the central government.
Karácsony said the city will pay HUF 33 billion of the HUF 58 bln it owes for the contribution, fielding a question from news agency MTI.
"We can't pay the rest and we don't want to either," he said.
Budapest will contest the scale of the contribution in court, arguing that the tax is illegal because the constitution prohibits deductions of local councils' own revenue, he added.
He noted that the HUF 58 bln solidarity tax is HUF 25 bln more than the scale of state support the city gets to provide public services.
He said some measures in a "survival program" drafted by the deputy mayor will be debated by the city council at a meeting in the coming week. The measures include deferring HUF 15 bln in operating expenditures until the fourth quarter and clearing the Budapest Public Transport Center (BKK) to take out a HUF 24 bln loan, he added.
Development spending, including monies for the renovation of the landmark Chain Bridge, would also be deferred till Q4, he said.
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