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PM Orbán to Tax Banks & Multinationals to Guarantee Hungarian Security by Robert Semonsen

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PM Orbán to Tax Banks & Multinationals to Guarantee Hungarian Security

Keeping good on his promise to lead an inclusive government that serves and represents the interests of the entire nation, Prime Minister Viktor Orbán—to protect the financial and military security of all Hungarians—will impose a temporary windfall tax on banks and multinational corporations who have reaped extra profits from the Ukraine war.

In a video message released on Wednesday evening via social media, Prime Minister Viktor Orbán said that the tax will affect multinational banking, insurance, retail, energy, telecommunication, and airline sectors, which collectively have profited extensively from rising interest rates and higher prices. The collected funds will be used to guarantee the country’s security, maintain high employment rates, as well as to protect the government’s family support system and overhead reduction policy, Mandinereports.

“The war is protracted, Brussels’ sanctions policy is not improving, and together these will lead to a drastic rise in prices,” Orbán began.

“Hungary’s system of regulated utilities prices shields families, but energy prices continue to climb and it is becoming more difficult and costly to protect those families. Additionally, we must strengthen the army without delay,” the prime minister continued.

Then, Orban—in a move rarely done by the vast majority of ‘conservatives’ in the United States and Europe—turned his attention to the multinationals who have profited off the backs of Hungarian workers paying outrageously high prices.

“Meanwhile, banks and big multinational companies are amassing bigger gains and extra profit through rising interest rates and higher prices,” Orbán said. “For this reason, the government has decided to set up a utility protection fund and a defense fund. From these, we will pay the costs of the regulated utilities price system and the strengthening of the armed forces.”

“We will require banks, insurers, big retail chains, energy industry, trading companies, telecommunications companies, and airlines to pay a large part of their extra profits into these two funds. These measures will be temporary, limited to two years: 2022 and 2023,” he added.

“We ask, we expect from whoever accumulates extra profit in this state of war to help people and contribute to the country’s defense costs.”

“As we have promised, we will protect families, pensioners, workplaces, and the regulated utilities price system in this drawn-out period of war, too,” Orbán concluded. 

A day later, while speaking to members of the press about the planned taxes, Minister of Economic and Development Márton Nagy said: 

The extra profit is essentially an unexpected profit, these extra revenues were generated in connection with the energy and food crisis in the companies concerned as a result of the war situation. The deductions for extra profit do not impair the originally planned growth of the companies, therefore their business plan will not be upended.

Nagy added that he doesn’t expect the new taxes to be passed on to Hungarian workers and pensioners, noting that if the multinationals do in fact raise prices, the government will take action on this issue as well. 

The Hungarian state is expected to collect 2.28 billion euros annually from the newly imposed taxes.

Robert Semonsen is a political journalist based in Central Europe. His work has been featured in various English-language news outlets in Europe and the Americas. He has an educational background in biological and medical science. His Twitter handle is @R_Semonsen.