About a year ago, in December, the Hungarian government announced its decision that local governments would be prohibited from raising local and municipal taxes in 2021, and that they would not be able to introduce new taxes or abolish existing tax breaks.

The Ministry of Finance then referred to the coronavirus epidemic, saying that this is how they can protect Hungarian businesses, families and homes. The decision favored domestic companies, but put the settlements in a difficult financial situation.

The Hungarian Gazette, published on Thursday evening, reveals that the government will extend the decree until 2022, which means that it will ban local governments from raising local taxes or imposing new ones next year as well. This further complicates the situation of local governments, as the tax package for 2022 includes the halving of the business tax for SMEs, which will deprive them of HUF 150 billion.

The regulation signed by Viktor Orbán has been in force since Friday, the first paragraph of the decree last December is amended as follows:

  • „1. § (1) In the tax year ending in 2021 and in the tax year ending in 2022, the rates of the local tax and the local tax may not be higher than the rates of the same local tax and local tax in the local government tax decree in force and applicable on 2 December 2020. established tax rate.
  • (2) The local government shall provide the tax exemption and tax relief in accordance with the tax decree in force on 2 December 2020 in the tax year ending in 2021 as well as in the tax year ending in 2022.
  • (3) The local government is not entitled to introduce a new local tax or a new local tax for the years 2021 and 2022. ”


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