It is certain that the increase in costs due to the extra profit tax will bring higher prices than EasyJet – the low-cost airline popular in Hungary replied to contact the HVG. As they wrote, “the effects of the current tax will also be taken into account in their decisions about future flights”.
The paper was also stressed that it was disappointed that the government had imposed an extra profit tax on airlines, at a time when the aviation sector was coming out of its downturn caused by the corona virus. It is believed that due to the tax burden, Hungary’s international connection may eventually deteriorate.
Three major low-cost airlines from Hungary, Wizz Air, EasyJet and Ryanair, operate flights to various destinations in Western and Eastern Europe.
The latter, an Irish company, has recently announced that it will pay passengers a special tax levied by the government. Jason McGuinness, the airline’s chief commercial officer, said it was more than stupid to impose a special tax on airlines when they were unprofitable due to the epidemic, the war in Ukraine and rising fuel prices. An earlier statement from Ryanair said that the amount of between ten and twenty-five euros per passenger, effective July 1, would irreparably damage Hungarian tourism, air connections, traffic and jobs.
What is it about?
Pursuant to the decree on the extra profit tax published in the Magyar Közlöny on 5 June, a special tax of HUF 3,900 and HUF 9,750 will be levied on airline tickets. The government announced at an outsourced government meeting that due to the protracted war situation, the government is setting up a defense and defense fund to pay special taxes to sectors that have earned extra profit in the recent past.
It has since emerged that Wizz Air is doing the same. We searched for them, but our editorial office has not yet received a response from the company. In any case, the government’s position is that if an airline passes on the special tax, the tax on them should be raised.
The cabinet does not see the matter as a political issue anyway, the leader of the Fidesz faction recently said that this is a simple consumer protection issue that needs to be investigated.
“Because these extra-profit taxes are intended to make large companies that make extra profits due to the war situation – for one reason or another – pay into the budget and not the Hungarian people: that’s why I agree with what the government has announced that a consumer protection investigation must be conducted here – they cannot be passed on, ”says István Hollik.
The capital’s government office has already launched an investigation into the company on Friday.
(Cover image: EasyJet passenger plane at Liszt Ferenc International Airport in Budapest on May 3, 2009. Photo: Adam Berry / Bloomberg / Getty Images)