Economy
Tax hikes in Hungary can come into effect in November at the earliest
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Due to meagre economic growth there is an estimated HUF 100 billion hole on this year’s budget. In order to remedy this situation and meet the deficit goal, to which the right-of-centre Fidesz-led government remains strongly committed, Prime Minister Viktor Orbán needs to come up with some revenue boosting and spending reduction measures.
He said last week that to this end “a few taxes" will be raised, such as the excise tax on gambling, tobacco and alcohol.The budget collected HUF 398.6 billion from these taxes in 2010 and the cabinet aims at HUF 404.8 bn this year. According to the latest data by the Economy Ministry, HUF 227.2 billion excise tax revenues were received until the end of July.
The largest chunk of the revenues would come from the excise tax on tobacco products, HUF 273.5 billion this year (vs. HUF 262.2 bn in 2010), of which HUF 152 bn were collected in January-July.
As of 1 January 2011 the excise tax on cigarettes was raised from HUF 9,350 to HUF 9,750 and the excise tax rate determined as a percentage of the retail price from 28.3% to 28.4% furthermore, the minimum excise tax changed from HUF 17,330 per thousand cigarettes to HUF 18,080.
The excise tax payable on fine-cut smoking tobacco and other smoking tobacco was also upped to HUF 7,860 from HUF 7,280.
Under a proposal squashed in July this year, the minimum excise tax / 1,000 cigarettes was to be raised to HUF 19,400 from HUF 18,080 and that on fine-cut tobacco would have gone up to HUF 10,060 from HUF 7,860 until next July.The excise tax on alcohol products should generate HUF 80 bn worth of revenues for the budget this year, of which HFU 46.3 bn were collected by end-July. Last year, HUF 83 bn were collected. The reason why this year’s goal is smaller is that since July 2010 the excise tax on home-brewed spirits is 0% up to 50 litres.
From the excise tax on gambling the cabinet aimed to collect HUF 51.3 bn this year (vs. HUF 53.4 bn in 2010). In the first seven months, HUF 28.9 bn were paid by companies operating games of chance and gaming machines. The latter pay HUF 100,000 per month in tax per gaming machine and HUF 120,000 in casinos.
Should Parliament amend tax laws by 15 September, the new regulations may be put into effect on 1 November at the earliest (45 days after the passing of the law). Therefore higher tax revenues can be expected only in November December this year, and then of course in the whole of 2012.
He said last week that to this end “a few taxes" will be raised, such as the excise tax on gambling, tobacco and alcohol.The budget collected HUF 398.6 billion from these taxes in 2010 and the cabinet aims at HUF 404.8 bn this year. According to the latest data by the Economy Ministry, HUF 227.2 billion excise tax revenues were received until the end of July.
The largest chunk of the revenues would come from the excise tax on tobacco products, HUF 273.5 billion this year (vs. HUF 262.2 bn in 2010), of which HUF 152 bn were collected in January-July.
As of 1 January 2011 the excise tax on cigarettes was raised from HUF 9,350 to HUF 9,750 and the excise tax rate determined as a percentage of the retail price from 28.3% to 28.4% furthermore, the minimum excise tax changed from HUF 17,330 per thousand cigarettes to HUF 18,080.
The excise tax payable on fine-cut smoking tobacco and other smoking tobacco was also upped to HUF 7,860 from HUF 7,280.
Under a proposal squashed in July this year, the minimum excise tax / 1,000 cigarettes was to be raised to HUF 19,400 from HUF 18,080 and that on fine-cut tobacco would have gone up to HUF 10,060 from HUF 7,860 until next July.The excise tax on alcohol products should generate HUF 80 bn worth of revenues for the budget this year, of which HFU 46.3 bn were collected by end-July. Last year, HUF 83 bn were collected. The reason why this year’s goal is smaller is that since July 2010 the excise tax on home-brewed spirits is 0% up to 50 litres.
From the excise tax on gambling the cabinet aimed to collect HUF 51.3 bn this year (vs. HUF 53.4 bn in 2010). In the first seven months, HUF 28.9 bn were paid by companies operating games of chance and gaming machines. The latter pay HUF 100,000 per month in tax per gaming machine and HUF 120,000 in casinos.
Should Parliament amend tax laws by 15 September, the new regulations may be put into effect on 1 November at the earliest (45 days after the passing of the law). Therefore higher tax revenues can be expected only in November December this year, and then of course in the whole of 2012.
