Hungarian Orban aims to maintain price cap and flags exceptional taxes

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BUDAPEST, April 6 (Reuters) – Hungary will strive to maintain the price cap beyond its imminent expiry in the first half of 2022 unless inflation slows significantly, Prime Minister Viktor said on Wednesday. Orban, as he unveiled the main economic priorities of his next government.

Orban, whose government has enjoyed close business ties with Moscow for more than a decade, swept to power for a fourth consecutive term in Sunday’s election. Read more

Orban stabilized the economy with a host of windfall taxes on banks, retail and energy companies after taking power in a landslide in 2010 that helped reduce the country’s budget deficit. Hungary while avoiding austerity measures, boosting Orban’s ranking in the polls.

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“Whether we will need special taxes on multinational companies or others like those levied after 2010 will depend on the decision of the European Union,” Orban told a news conference.

“If the EU cannot control rising energy prices, we will have to take action in Hungary. They call it windfall taxes, which are made in certain sectors and can help finance policies protection of families.”

He did not specify which sectors could be affected by the amount of revenue targeted by such a measure. Orban must also reduce a ballooning budget deficit.

Faced with inflation soaring to highs nearly 15 years before the vote, the 58-year-old nationalist leader imposed caps on staple foods, fuels and mortgages, extending price restrictions on bills household energy plan in place since 2015. read more

However, economists say rising gas prices in Europe are making caps on household bills unsustainable, while fuel price caps in place since mid-November are causing losses for Hungarian energy group MOL (MOLB. DRANK).

“The price cap measures have an expiration, they will remain in place until then permanently, and I would like to keep them as much as possible later as well, we are negotiating… we need to have discussions with the banks, MOL.. . . food retailers,” Orban said.

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(Reporting by Krisztina Than and Gergely Szakacs, editing by Ed Osmond)

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