Budapest denies tax payment to the State, files lawsuit against it

The capital city council is bringing an administrative action against the Hungarian state for imposing an illegal tax. Budapest refuses to pay the tax to the state.

The capital “will suspend the government’s funding”

“The Municipality of the Capital will suspend the government’s funding in the coming months,” Gergely Karácsony, Mayor of Budapest, began his presentation of the capital’s action plan on Wednesday morning. The package aims to avoid bankruptcy for Budapest. This is because the capital city could face a budget deficit of up to HUF 76 billion (EUR 200.9 million) by August, according to current forecasts, 444.hu reports.

Government is “committed to an anti-Budapest policy”

According to Mr Karácsony, the capital can solve those crises that are not of a domestic nature (covid, energy crisis), but the government is “committed to an anti-Budapest policy”. A sign of this is that in 2018, under István Tarlós (Fidesz), they only had to pay HUF 5 billion (EUR 13.2 million) in solidarity tax to the state, whereas this year, they have to pay HUF 58 billion (EUR 153.3 million).

Of this, HUF 25 billion (EUR 66 million) is considered illegal and will not be paid to the government, Mr Karácsony said. According to him, it will not be possible to collect it either, because there will be no money in the capital’s account.

The reason why HUF 25 billion is being withheld is because the capital currently pays that much more into the budget than it receives in state aid, 444.hu clears.

The capital will file a lawsuit

Gergely Karácsony also announced that they will file an administrative lawsuit against the Hungarian state because they believe that the solidarity tax is against the constitution, vg.hu reports.

Karácsony said that in the next period, they will ask the opinion of the people of Budapest. They want to build a “pro-Budapest coalition” with the voters of the capital, regardless of party affiliation. “Give us your opinion on how the government and the capital should work together (…) We don’t want to punish the people of Budapest, but to bring them on board in the debates with the government.”