Hungarian Foreign Minister: Global minimum tax would be ‘death blow’ for EU economy
The introduction of a global minimum corporate tax would be the “death blow” for the European economy and put the Hungarian economy to the test, the Minister of Foreign Affairs and Trade said in Washington DC on Wednesday.
Péter Szijjártó is meeting with representatives of ten US companies, two US senators and five members of Congress, and will address a forum of Americans for Tax Reform, a conservative advocacy group, on the issue of the global minimum tax. The global minimum tax would threaten hundreds of thousands of jobs in Hungary, and essentially “reduce Hungary to the state of affairs in 2010”, the ministry quoted Szijjártó as saying.
Hungary’s low corporate tax rate, “officially 9% but in practice reaching 6-7% taking into account rebates and investment support”, has been the basis of its competitiveness and the root of its investment records in recent years, he said. The planned minimum tax of 15% would double that rate, he added.
Szijjártó noted that the global minimum tax was also a hot topic in American politics, as a Democratic government goal strongly rejected by Republicans. The midterm elections in the fall could therefore upset the issue, he said.
The US government has so far protested Hungary’s veto of the European introduction of the minimum tax “in several forums”, culminating in the US terminating the two countries’ agreement on the elimination of double taxation, he said.
“We are optimistic that the agreement will be enforced again once the political winds change,” Szijjártó said. So far, the political argument has had no negative impact on bilateral economic relations, he said, adding that “American companies support low Hungarian taxes.”
Business leaders are most concerned about high inflation and soaring fuel and energy prices, he said. “It is important for us in Hungary to do everything in our power to remain a local exception to the great global recession,” Szijjártó said, stressing the importance of price caps, controlling inflation, low taxes and utility price caps.