No. T/4064 amending Act C of 1990 on local taxes bill it was jointly developed and submitted to the Parliament by NAK and the Association of Hungarian Farmers’ Associations and Farmers’ Cooperatives (MAGOSZ), as well as government actors.
Consisting of only two paragraphs draft law its general justification recalls that “The amendment of Act C of 1990 on local taxes (hereinafter: Law) which entered into force on January 1, 2015 enabled local governments to levy a settlement tax on any taxable object in their area of jurisdiction, which is not provided for by law prohibited, moreover, which is not covered by the scope of a public burden regulated by law. In practice, the local governments primarily taxed agricultural land with a local tax, which the Htv. 51/P. With the expiry of the moratorium on the imposition of a new settlement tax according to paragraph (3) of § §, it became more stringent. In order to eliminate the practical application of the land tax that affects agricultural land, it is also stated in the Htv. that the right of the local government to levy a settlement tax does not extend to the taxation of land.”
In the detailed justification, the submitters stated that
In our opinion, the taxation of parcels of land registered as agricultural land is not justified. That is why the draft law stipulates that the right to impose municipal taxes on agricultural land, agricultural land property or property rights existing on agricultural land should be abolished.
The minister recalled: at the end of March, he received a petition from the Hungarian farmers’ organizations, which was confirmed by 120,000 signatures, which was launched by MAGOSZ and NAK for the abolition of the land tax, after Péter Márki-Zay, the mayor of Hódmezővásárhely, imposed a land tax on local farmers. The minister said: he himself signed the petition, because it is not right to cut off farmers with land tax. He added: the government is committed to the fact that agricultural land cannot form the basis of taxes, and this is enforced by legislation.
István Nagy spoke about how, as a result of the Russian-Ukrainian war, a significant part of the export of Ukrainian grain and oil crops was diverted from the previously usual southern Ukrainian port route to the land routes of the European Union member states neighboring Ukraine. According to him, it was a symptom of that while in normal years around 40,000 to 50,000 tons of imports arrived from Ukraine to Hungary, in 2022 it approached 2 million tons, and even after that, the amount received was several hundreds of thousands of tons per month. Land imports were also stimulated by the operation of the EU solidarity corridors and the suspension of customs duties, he noted.
However, it has now become clear that the solidarity corridors do not fulfill their original mission, they do not contribute to the food supply of the population in Africa and the Middle East, but (…) they destroy the Central European producers with their lower price level and market crowding out effect
he pointed to it.
He reminded that in recent months, Hungary has acted jointly with the Poles, Slovaks, Romanians and Bulgarians in order to create meaningful EU measures to deal with the problem. The EU agreement has been reached – the minister said – but with regard to contracts with earlier dates, the EU legislation still allows imports. For this reason, the Hungarian government maintained the national ban on contracts before the publication of EU legislation, i.e. before May 2 – he highlighted. The minister also pointed out that the stronger presence of Ukrainian agricultural products than before may also be a problem in the coming years.
Balázs Győrffy, the president of the NAK, spoke about, among other things, that in their document prepared five years ago, they formulated specific proposals that lay the foundation for the development of Hungarian agriculture, and that significant progress has been made in many areas in recent years. He cited as examples the amendment of the Land Transfer Act, the legislation on family farms, the increase of Hungarian co-financing related to EU rural development resources to the maximum rate of 80 percent, the changes implemented in connection with undivided common property and the change of generations.
Balázs Győrffy reported that in recent months, the NAK once again examined the sector’s situation in a complex manner and formulated the necessary steps to improve efficiency and competitiveness. The president stressed that the organization has become an unavoidable and decisive player in the Hungarian economy and agriculture during the past decade.
Cover image source: MTI/Zoltán Máthé. Minister of Agriculture István Nagy will give a speech at the national meeting of delegates of the National Chamber of Agrarian Economy in Gödöllő on May 19, 2023.