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Parlʼt approves legislation on special economic zones

Parliament passed legislation on Tuesday allowing the establishment of special economic zones with the aim of expediting investments and related infrastructure developments, state news wire MTI.

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Provisions in the legislation requiring a two-thirds majority to pass were approved with a vote of 134 for, 59 against and no abstentions. Provisions requiring a simple majority were passed with a vote of 135 for, 59 against, and no abstentions.

The legislation allows the government to designate the zones at sites of investments worth HUF 5 billion or more with the aim of supporting the quick and efficient implementation of those investments and necessary infrastructure upgrades.

It also allows tax revenue from the areas to be rechannelled from local councils to the county level.

The bill, tabled by the government, had come under fire for diverting that tax revenue, but the government argued that the measure allows a more proportionate allocation of resources among all communities impacted by such investments.

The government said establishing the zones will support the economic recovery from the coronavirus pandemic, create new jobs and preserve existing ones.

The final draft of the bill was modified to clarify that the special economic zones may not be designated in the capital, county seats, or cities with populations of over 50,000.

The government earlier designated a special economic zone in the municipality of Göd, on the outskirts of Budapest, where Koreaʼs Samsung plan to build an EV battery plant. The designation was made in a decree issued while Hungaryʼs government exercised state of emergency powers because of the coronavirus pandemic.

According to a report by news site Index.hu, in April, Göd Mayor Csaba Balogh called the decision a "death sentence". The mayor, a member of opposition party Momentum, argued that the city will be dispossessed of tax revenues, adding that locals will have no influence over the nature, location, and environmental impact of projects built in the special zone.