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Hungary vetoes global corporate minimum tax

June 21st, 2022

A conservative economist agrees with the government that the introduction of the global minimum tax would harm the economic interests of Hungary and Europe. His left-wing counterpart, on the other hand, thinks that tax hikes would benefit workers and would help the government balance the budget.

The Hungarian government vetoed EU plans to introduce the 15 per cent corporate tax proposed by the US government. Foreign Minister Szijjártó and Minister of Finance Mihály Varga said that higher taxes would result in the loss of tens of thousands of Hungarian jobs.

In an interview with 888.hu, André Palóc, analyst of the pro-government Századvég policy institute agrees with the government that a global minimum tax would weaken the competitiveness of Hungary and Europe in general. Palóc contends that the Hungarian government boosted the economy and created 800,000 jobs since 2010 through tax cuts. He adds that the introduction of a global corporate minimum tax would further weaken Europe’s economic prospects, already threatened by the Ukraine war and inflation.

Quoting leftist economist Zoltán Pogátsa on 24.hu, Attila Pap contends that the proposed global minimum corporate tax would serve the interests of workers. The left-wing economist believes that the global tax would end the ‘race to the bottom’ in corporate taxation which is a means of attracting assembly plants  and thereby condemns workers to low wages. Pogátsa finds it controversial that the Hungarian government insists on keeping corporate taxes low, while it has introduced a tax on ‘surplus profits’ to fill the holes in the budget. Pogátsa is also confident that multinational firms would not leave Hungary even if corporate taxes were raised to 15 per cent from the current level of 9 per cent.

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