Government official: Brussels decided excise tax of fuels must be raised in Hungary

Whereas Hungary’s tax regulations for 2024 are family-friendly and are aimed at simplicity and whitening the economy, the EU is insisting on higher excise tax on fuels and the introduction of an environmental product fee, a finance ministry official said on Tuesday.

Hungary will maintain “one of Europe’s lowest corporate and personal income tax rates, family tax benefits, tax exemption for people with four children, mothers under 30 and all people younger than 25,” András Tállai, state secretary at the finance ministry, said in a statement.

Also, the low VAT rate for basic foodstuffs will also be maintained, he said, adding that family support would exceed a combined HUF 3,300 billion (EUR 8.8 billion) next year.

Concerning fuels, Tállai said: “Brussels has decided that the excise tax of petrol and diesel must be raised in Hungary … For environmental reasons, they will make fuels expensive so that people consume less,” he said. Tállai noted that the government had been granted an exemption to raise its taxes to EU levels this year, “but we must meet the EU directives next year.”

Referring to “erroneous” press reports, Tállai said raising the excise tax on fuels would not impact the price of tobacco products or alcohol.

Concerning environmental regulations, Tállai said a registry and monitoring system of packaging materials and bottles must be set up, and this will increase expenses incurred in waste management. In the new system, producers will be required to pay a higher fee to cover waste management under the “polluters pay” principle, he said, adding the measure would encourage producers to create less waste and use more recycled and environmentally friendly materials.

“While this is understandable from an environmental point of view, in the current times of war and economic hardship, it will place a further burden on businesses,” he added.