Budapest district to tax every Budapest Airport passenger from January!

The new tax introduced by the 18th district of Budapest will mean that everybody will have to pay more for the plane ticket since part of the price will go to the local budget. The only exemptions will be the residents of the district and those below 18. The local council says the Hungarian finance ministry gave green light on the idea, but airlines and ground handling companies are outraged. There is still a huge question mark behind the measure, but the district seems determined and would like to start taxing the airport passengers from 1 January. Below you may read the details.

The idea of the so-called “passenger tax” appeared first in end-November as a reaction to the soaring energy prices, skyrocketing inflation and other growing expenditures of the 18th district local government. Since the government keeps the local governments’ income low, they need to find new ways to provide enough money for their operation, Telex.hu wrote. The idea of the 18th district is one of a kind for sure.

The opposition-led local council already accepted the relevant decree, and one of the deputy mayors said the finance ministry gave the green light.

However, Telex said that airlines and ground handling services are critical towards the idea. If nothing changes, all passengers will have to pay more from 1 January.

Gergely Juhász, a taxation expert of PwC, told Telex that local governments received extensive rights for taxation under the Orbán cabinet. That means they can introduce so-called “local taxes” on activities happening in the district. The only condition is the obligation to avoid double taxation. As a result, some local governments wanted to tax plants growing in the fields and even transmission towers.