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Emergency order targets ‘extra profits’ — Analysis

Hungary will order banks, insurers, airlines and other big corporations to hand over “extra profits” to fund the military

Viktor Orban (Prime Minister) announced that Hungary plans to finance the military and social protection programs using taxation on banks, insurance companies as well as airlines and energy utilities.

He took the action as a result of the state emergency Budapest had just declared.

“We ask and we expect that those who made extra profit in this time of war help the people and contribute to the national defense budget,”Orban stated this in a Facebook video. 

Orban stated in a post that the government is pursuing a “reform” of its economy. “drastic increase in prices”It was due to ongoing conflicts and the “sanctions policy in Brussels,”While “banks and large multinational companies”Increasing interest rates are bringing in extra revenue.

The Hungarian government established two funds to fund social security networks and the military. “require banks, insurers, major trade chains, energy and retail companies, telecommunications companies and airlines to deposit a large portion of their extra profits” there.

Orban stated that the new regime will continue to be in force for 2022-2023.

Budapest announced the state of emergency on Tuesday, just hours after Orban’s new cabinet was sworn in. The Hungarian parliament quickly approved a constitutional amendment allowing emergencies to be declared in case of war in a neighboring country – in this case, Ukraine. 

Orban’s extra-profit tax affects mainly multinational companies. According to Bloomberg News, it will help shore up Budapest’s budget due to a de facto EU embargo. Brussels had imposed a funding freeze against Orban’s government following his landslide victory in last month’s election, citing “rule of law concerns.”

EU officials adopted funding freeze regulations in an effort to press Hungary and Poland to adopt the EU policies regarding immigration, judiciary, LGBT and other issues.  

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