Orbán cabinet: Budapest ‘can’t get out of paying taxes’

The Budapest municipality is going against the Constitutional Court’s decision, which in October rejected Budapest’s proposal that the solidarity tax the municipality was called on to pay to support poorer localities was unconstitutional, a state secretary of the finance ministry said on Monday.

State secretary András Tállai said that this year, 848 “wealthier” localities paid a solidarity contribution to aid 1,250 localities in performing their tasks. “It is peculiar that it is the richest city of the country, the capital, that finds supporting poorer localities difficult,” Tallai said.

Tallai said government support for local authorities will increase to 1,266 billion forints (EUR 3bn) from 1,050 billion this year, and additional funds will flow into wage costs.

In reaction to Karácsony’s statement that the city would not pay some 50 billion forints in solidarity contribution, Tállai said,

“Everyone has to comply with the law.”

Last week, Budapest Mayor Gergely Karácsony said that in a bid “to retain the municipality’s self-determination and resources,” the city’s budget had been drafted on the assumption that

“Budapest will pay as much solidarity tax to the central budget as it receives from central coffers to finance its services.”

UPDATE

Karácsony: Budapest’s real problem is ‘no money’

Gergely Karácsony, the mayor of Budapest, told a conference on Monday that the capital’s “real problem” was that the municipality had “no money”.

Karácsony said at the Republikon Institute gathering that it was not especially the political gridlock in the assembly or the fact it had been impossible to appoint a deputy mayor that was holding the city back, but rather that it was in the midst of an economic crisis and had fallen victim to a government policy of blackmail.

He said the city assembly was a battleground between its biggest factions, Fidesz and the Tisza Party, both of which exploited Budapest affairs to position themselves ahead of the 2026 general election.

Recent months had shown that

“Fidesz votes no to everything”, so decisions can only be made with the ten-member Tisza faction.

Karácsony said it would be hard to overcome the gridlock if local politicians focused solely on the city’s affairs as even then “the lightning of national politics strikes above us”.

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