Near bankruptcy? The government recovers the debt from the municipality of Budapest

The municipal court of appeals of Budapest has ruled that the city of Budapest cannot be exempted from certain tax payments, the finance minister said on Facebook on Tuesday, adding that the treasury had already collected 2 billion forints (EUR 5m) in tax arrears from the city’s account.

Mihály Varga said that with this latest deduction, the city has collected a total of 30 billion forints owed to the treasury.

Meanwhile, the minister insisted that Budapest was bankrupt. While the municipality received 102 billion forints in tax revenues in the first four months of the year, its funds dwindled to 9 billion forints by the end of April, its debt portfolio swelled by 30 billion forints, and the city still owed the treasury a further 5 billion forints in unpaid taxes, he said.

“Left-wing fake reports blame the government for the city’s empty coffers, but the facts refute this: in the past five years, Budapest received over 1,200 forints in tax revenues and state support, while it was expected to pay a solidarity tax of 188 billion to assist poor municipalities,” the minister said.

The city of Budapest administration sued the government last September, seeking a reduction in the solidarity tax, and it was granted legal protection for the duration of the proceedings. In November, the city filed a complaint because the treasury had collected 5.6 billion forints from its account despite the legal protection.

As we write yesterday, Budapest mayor Karácsony submits proposal to repeat election to top court.