Hungary seeking 'defence contribution' from multinational firms, banks, energy sector - Hindustan Times
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Hungary seeking 'defence contribution' from multinational firms, banks, energy sector

Reuters |
Jul 08, 2024 03:07 PM IST

HUNGARY-GOVERNMENT/TAXATION (UPDATE 1):UPDATE 1-Hungary seeking 'defence contribution' from multinational firms, banks, energy sector

BUDEST, - Hungary's government will seek a "defence contribution" from banks, energy firms, and multinational companies, Prime Minister Viktor Orban's chief of staff said on Monday.

Hungary seeking 'defence contribution' from multinational firms, banks, energy sector
Hungary seeking 'defence contribution' from multinational firms, banks, energy sector

Gergely Gulyas said every multinational company that earns extra profit amid current "wartime" conditions must pay a contribution to the state's defence fund.

Hungarian banks' profits grew as the central bank pushed up interest rates - as elsewhere in Europe - to counter an inflation surge partly driven by fuel price rises following the war in Ukraine. Electricity price rises have also boosted energy firms' earnings. Hungarian interest rates are still among the highest in the European Union.

Since Russian forces invaded Ukraine in 2022, Hungary has refused to send weapons to Kyiv and has maintained close economic ties with Moscow.

Orban met Russian President Vladimir Putin last Friday, and on Monday he met Chinese President Xi Jinping on what he has said was a Ukraine "peace mission".

Orban's government is contending with a budget deficit that is well above EU limits: the shortfall averaged nearly 7% of economic output over the past four years.

Announcing measures as part of a "anti-war action plan" Gulyas said after the government met on Monday that Hungary would also keep windfall taxes on retailers and multi-national companies this year instead of phasing them out as expected, and that a portion will go to what he described as a "defence fund."

The state would tax banks' foreign currency transactions and hike transaction fees, he said.

MOL, which operates refineries in Hungary, Slovakia and Croatia, is Hungary's largest revenue earner and imports most of the crude it needs from Russia via the Druzhba pipeline. The windfall tax imposed last year siphoned off nearly all profit earned by MOL on cheaper oil imported from Russia.

This article was generated from an automated news agency feed without modifications to text.

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