Gov't issues decree on windfall taxes

Government

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Hungary's government issued a decree on Saturday detailing temporary taxes on "extra profit" companies in the banking, insurance, energy, retail, telecommunications, airline, and pharmaceutical sectors will pay in 2022 and 2023, according to a report by state news wire MTI.

The decree requires banks to pay a special tax on net revenue of 10% in 2022 and 8% in 2023.

The decree applies the financial transactions duty to securities transactions at a rate of 0.3% but no more than HUF 10,000 per transaction.

The decree levies a 25% tax on the spread between Russian crude and Brent for refining businesses. 

The decree requires airlines to pay a HUF 3,900-per-passenger contribution for travelers on flights bound for countries in the European Union as well as destinations in Albania, Andorra, Bosnia and Herzegovina, North Macedonia, Iceland, Kosovo, Liechtenstein, Moldova, Monaco, Montenegro, the UK, Norway, San Marino, Switzerland, Serbia, and Ukraine. The contribution for other destinations is HUF 9,750 per passenger.

The decree requires telecommunications companies and insurers to pay progressive, "substitute taxes".

Economic Development Minister Márton Nagy said in an interview with public radio that the windfall taxes would raise over HUF 800 bln in 2022 and generate budget revenue reaching HUF 1 tln in 2023.

Revenue from the windfall taxes will be channeled into funds supporting the regulated utility prices scheme for households and the upgrade of Hungary's military defense.

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