Ryanair calls Hungarian windfall taxes ‘unjustified’ and ‘misguided’
Ryanair on Wednesday called on Prime Minister Viktor Orbán’s government to scrap the new tax levied on departing passengers as part of efforts to curb the rising budget deficit, Reuters reports.
As we have reported, new exceptional taxes have been introduced by the Orbán government, worth 800 billion forints (2 billion euros) on the “additional profits” made by banks, energy companies and other companies last month.
The Prime Minister said earlier that banks, insurance companies, large retail chains, energy and trading companies, telecommunications companies and airlines would be forced to pay “a large part of their excess earnings” to these two funds.
The new funds will fund the government’s program to cut public services and development projects for the military, Orbán said. He added that the new measures would apply for 2022 and 2023.
The new levy on the airline industry involves a tax worth 10 to 25 euros on passengers departing from Hungary from July, Reuters writing.
“This unjustified tax on the air sector (which has been heavily loss-making over the past two years) will be detrimental to Hungarian tourism and the economy, which depends on air carriers for connectivity, tourism and jobs,” said said Ryanair. , adding that “this ill-timed and misguided additional profit tax, which inexplicably compares the loss-making aviation industry to hugely profitable oil and energy companies, has instantly made Hungary uncompetitive and less attractive to airlines and tourists.”
Ryanair also said Reuters that the new tax would be forced to shift growing capacity to countries working to restore traffic.
Ryanair is not the only one unhappy with the decision. Last month, Wizz Air said it would take a long time for the airline industry to return to pre-pandemic levels of revenue and profitability and that the tax would hamper the recovery of the tourism sector.
Reuters also mentioned that Magyar Telekom cut its 2022 profit forecast on Sunday following new corporate taxes, while Hungarian banks said the levies could hurt their lending capacity. OTP Bank said the new tax would cost them 78.3 billion forints (199 million euros) this year alone.
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