The government has made a range of decisions on the taxation of large companies and polluting companies, the elimination of tax avoidance practices by trusts, and a taxation practice that selectively punishes companies, Prime Minister Péter Magyar said late on Friday in a post on social media.

“We are also putting in order the payment of corporate tax by large global companies, which means expanding tax bases and narrowing certain tax benefits. We are also doubling the air pollution charge paid by polluting companies and preparing to introduce environmental rules and tax changes that will force large water users and polluting companies to comply with environmental and health regulations while protecting our natural resources,” Magyar said.

The prime minister said several smaller types of taxes will be abolished and “the Orban government’s taxation practices, which violate EU legislation and selectively penalise certain companies, will be eliminated”.

“We will completely abolish five unnecessary taxes, eliminate pointless administration, and close tax loopholes that the Orban regime created for the richest. In addition, we will remove additional obstacles to bringing home EU funds,” he added.

The separate settlement tax levied by local municipalities, in only 25 settlements nationwide, will be abolished. Canine tax, levied in only 16 settlements, will be scrapped, as will a special immigration tax.

“We will eliminate a tax levied on carbon quotas and the related transaction fee. This tax was intentionally introduced by the previous government to specifically punish some companies,” Magyar said, adding that this tax violated EU rules and now presents a HUF 100bn repayment burden for the country.

The prime minister said the Tisza government is not anti-industry, and they are creating a predictable, industry- and business-friendly economic environment, as Hungary needs investments, modern technology, decent jobs and strong Hungarian businesses. He noted, however, that it is the legitimate expectation of every Hungarian that all companies take care of the cleanliness of waters, air and land.

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Magyar said they will eliminate the benefits that almost exclusively served global corporations and privileged economic actors and political foundations. Unjustified tax breaks related to public interest trusts, allowing support given to such foundations to be deductible from the tax base for triple the amount, will be eliminated.

The Tisza government proposes to close loopholes and examine tax avoidance practices retrospectively. This is expected to generate tens of billions of forints in tax revenue annually for the budget, he said.

Magyar said the head of Hungary’s National Tax and Customs Authority (NAV) will be selected through an open, transparent application process, and unlike previous practice, the president will not be a state secretary in the government.

He said relevant legislative proposals on these matters will be submitted to the Parliament on Friday, and the government’s decisions will be published in the official gazette Magyar Közlöny.

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