Economy
Softer rules on Hungary's "chips tax" get pushed aside
Font and his fellow Fidesz MP József Kovács project HUF 20 bn annual revenues from the “chips tax". Kovács, however, believes the overall budget impact could be negative.Consumption of the affected products - those with excessive salt, sugar, carbohydrate and caffeine content - may drop and this would lead to a decline in VAT revenues, while the HUF 20 bn revenues cannot be used to offset this influence, i.e. they could go exclusively for public health purposes.Both MPs acknowledged that the imposition of the product fee could lead to job cuts, but Font believes no more than a few hundred jobs could be affected.
On the other hand, he expects the affected companies to switch to the production of healthy products. He said they have “checked it" and found that each of these firms could do it.
The MPs claim concerns are groundless that the imposition of the tax during the year would put the producers in an impossible state, because retail chains will not accept their elevated prices.
“They will accept them. And if they don’t, the producers don’t have to supply them," Font said.
The mistake of the original bill was acknowledged in yesterday’s amendment proposal, submitted by Fidesz MPs Zoltán Nógrádi and László Vécsey. They pointed out that suppliers in Hungary sign annual contracts with retailers and these agreements may be modified in a limited number of cases during the year. The same goes for price increases.
As the producers cannot pay the public health product free from their own resources, they would need to incorporate a part of it in their prices. And if this cannot be made via amending their existing contracts they will need to find out sources that may lead to layoffs, the amendment proposal says.
The businesses whose products become subject to the public health product fee will be granted a business tax break, under a new proposal that was backed by those who submitted it and also by parliamentary committees. This particular regulation, however, will enter into effect only if the European Union green-lights it.
Most of the amendment proposals to the “chips tax" bill were rejected by the relevant committees, even those that were submitted by Fidesz MPs. This way cocoa powder would not be exempt from the tax, while soft drinks with a fruit content of over 25% would be.
Font confirmed that the law will be applied only on pre-packaged products manufactured in industrial volumes. Index.hu asked him why retail-sized products with excessive salt or sugar content are not regarded as unhealthy, or if they are why are not they taxed, as well, but Font declined to explain.
On the other hand, he expects the affected companies to switch to the production of healthy products. He said they have “checked it" and found that each of these firms could do it.
The MPs claim concerns are groundless that the imposition of the tax during the year would put the producers in an impossible state, because retail chains will not accept their elevated prices.
“They will accept them. And if they don’t, the producers don’t have to supply them," Font said.
The mistake of the original bill was acknowledged in yesterday’s amendment proposal, submitted by Fidesz MPs Zoltán Nógrádi and László Vécsey. They pointed out that suppliers in Hungary sign annual contracts with retailers and these agreements may be modified in a limited number of cases during the year. The same goes for price increases.
As the producers cannot pay the public health product free from their own resources, they would need to incorporate a part of it in their prices. And if this cannot be made via amending their existing contracts they will need to find out sources that may lead to layoffs, the amendment proposal says.
The businesses whose products become subject to the public health product fee will be granted a business tax break, under a new proposal that was backed by those who submitted it and also by parliamentary committees. This particular regulation, however, will enter into effect only if the European Union green-lights it.
Most of the amendment proposals to the “chips tax" bill were rejected by the relevant committees, even those that were submitted by Fidesz MPs. This way cocoa powder would not be exempt from the tax, while soft drinks with a fruit content of over 25% would be.
Font confirmed that the law will be applied only on pre-packaged products manufactured in industrial volumes. Index.hu asked him why retail-sized products with excessive salt or sugar content are not regarded as unhealthy, or if they are why are not they taxed, as well, but Font declined to explain.
