The Hungarian government has introduced a new excess profit tax for the country’s pharmaceutical manufacturers due to a looming budget deficit. Depending on the turnover, they have to pay up to eight percent of their net income to the state. The government’s regulation came into effect on Saturday.
The maximum fiscal turnover applies to pharmaceutical companies with a net annual income of more than 150 billion forints (about 375 million euros). It also applies retroactively to 2022. According to the business portal “portfolio.hu”, the new tax is intended to reduce the feared high budget deficit. The Hungarian government originally budgeted for a deficit of 4.9 percent of gross domestic product (GDP) for this year. Now frozen billions in aid from the EU are added. For the country that is 6.3 billion euros.
Further cuts may follow, around 22 billion euros from the so-called cohesion fund. The European Commission’s argument was that the conditions for promoting structurally weak areas were not currently met.
Energy corporate tax
As early as July this year, Hungary’s right-wing government introduced an “extra profit tax” to skim off actual or perceived excess profits from various sectors of the economy. Think of energy companies, banks, insurance companies, telecommunications companies and airlines.
The new tax on pharmaceutical companies requires manufacturers to pay up to eight percent of their net income to the state, depending on sales. The corresponding regulation was published late Friday evening and has been in effect since Saturday.
Source: Krone
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