Hungary slaps windfall tax on corporations to cover costs of war

Banks, telecommunications, and energy companies are among those to be taxed to help pay for defense costs and utility price caps

editor: Thomas Brooke
author: Remix News
Prime Minister Viktor Orbán announces windfall tax. (Facebook)

Hungary will levy a windfall tax on corporations in a range of economic sectors to help cover the costs of the ongoing war in neighboring Ukraine, Prime Minister Viktor Orbán announced on Wednesday.

In a video posted on his official Facebook account, Orbán explained the levy was necessary to help pay for the cost of capping utility prices and the requirement to rearm and bolster national defenses.

“The war is dragging on, the sanctions policy in Brussels is not improving, and together it will lead to drastic price increases,” Orbán warned, highlighting that today overhead cuts protect families, but energy prices will continue to rise, making it increasingly more difficult and costly to protect families. “In addition, we must strengthen the army immediately,” he stressed.

“Meanwhile, rising interest rates and rising prices are giving banks and large multinationals greater profits, extra profits. The government has therefore decided to set up a utility fund and a defense fund,” the Hungarian leader announced.

“From here we will pay the costs of reducing overheads and strengthening the army. We are obliging banks, insurers, large retail chains, energy and trading companies, telecommunications companies and airlines to pay most of their extra profits into these two funds”, the prime minister said.

Viktor Orbán added that that the windfall taxes will remain in effect until the end of 2023.

“Those who make extra profit in this war situation are being asked to help the people and contribute to the country’s defense costs,” the prime minister said. “As we have promised, we will protect families, retirees, jobs and overhead cuts even in a protracted war situation.” He also said that the exact details of the windfall tax will be revealed on Thursday.

It isn’t the first time that Orbán’s conservative Fidesz party has introduced such a policy — they also levied an extra tax on banks and telecommunications companies when they first came to power in 2010 in order to replenish a treasury depleted by the previous Socialist-Liberal Democrat government.

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