Magyars abandon latest crisis tax plan following EU intervention

22 Nov 2012

According to an unconfirmed report from EU Business News, the government of Hungary has abandoned plans to implement a controversial ‘crisis tax’ on the retail and telecoms sectors that it planned to bring in from January 2013. Amid European Union (EU) calls for them to be scrapped, late on Wednesday Budapest reportedly issued a statement saying: ‘The Hungarian government, independent of this [EU] request and acting on an earlier decision, will stop in its entirety the temporary special taxes levied on certain sectors – retail and telecommunications – from 1 January 2013’. The move, however, came hard on the heels of a European Commission (EC) call for Hungary to amend the special taxes, which it called ‘discriminatory’ as they might ‘disproportionately affect’ non-Hungarian operators. The EC gave Budapest two months to comply with EU law in this area, adding that failure to do so would result in infringement proceedings, including the matter possibly being brought before the EU’s Court of Justice. The Hungarians have attempted to deny that the move was a result of EU pressure saying that it was intending on abandoning the plan anyway and that ‘the Commission is banging on an open door’.

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