The Hungarian government is planning extremely high tax revenues – who will pay?
The 2023 state budget shows that the fifth Orbán government wants to significantly increase its tax revenues. They state that companies will pay for the increase, but the figures do not confirm this, claims one of the Hungarian media. Népszava says the government plans to collect HUF 5.5 trillion (€13.74 billion) in additional taxes in 2023. Taxpayers’ contribution will increase by a third.
According Nepszava, the government is trying to convince people that the tax will not affect them. However, this is untrue, says the Hungarian media. An example is the Ryanair policy.
The low-cost airline announced earlier that it would pass on the new government tax to passengers.
But there are even bigger problems.
As Népszava points out, the 2023 budget figures also show that Hungarian taxpayers will have to pay the costs. The government wants to increase its tax revenue by 5.5 trillion HUF (13.74 billion EUR), aiming to collect 30.976 billion HUF (77.37 billion EUR) in 2023.
The cabinet recently decided on the necessary budgetary adjustments. Based on their announcement, the restrictions are for 2022 and 2023.
They plan to collect HUF 8-900 billion (EUR 2-2.2 billion) as additional taxes and cut spending by HUF 1,000-1,200 billion (EUR 2.5-3 billion). EUR). As a result, the annual fiscal adjustment will reach HUF 2 trillion (EUR 5 billion).
However, the 2023 budget shows different figures. The additional budget income from additional taxes will reach 900 billion HUF (2.2 billion euros), but there will be an additional 4.6 trillion HUF from other sources. Businesses will pay HUF 1 trillion more into Hungary’s budget, which is a huge increase in contributions.
The rest, 3.6 trillion HUF, will be paid by the citizens.
Increases in income and consumption taxes will provide the sources, argues Népszava.
Personal income tax increases will be the result of wage increases and job growth. The government plans to collect 30 pc more on VAT and 27.7 pc more on consumption tax. In addition, the government wrote that its excise duty revenue would increase by 12.6 percent. The Ministry of Finance did not add an explanation. Népszava thinks the reason for the government’s optimism could be consumption growth, inflation and their experience in 2022 when VAT revenues were higher than expected.
At the same time, the government plans to reduce the number of public employees.
The Orbán cabinet would like to save 30 billion HUF (75 million EUR) with this. Moreover, most public employees will not get a salary increase in 2023, when inflation could reach 6-7 pc.