Government Makes Big Money from VAT on Utility Bills!

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353A0226After twelve years of continuous, unlimited power, the government could finally afford to be honest, or at least not to mislead the Hungarian public with deliberate lies. While Fidesz is always talking about Hungarian people, Hungarian families and their protection and representation, it is usually betraying, deceiving and conning them behind their backs. This is what they are doing now in the case of the reduction of the cuts in overheads, when they are trumpeting in advertisements paid for (with public money) that they will defend the cuts even in the current difficult situation – but this is factually untrue. It is not only a lie because the majority of the population will soon feel on their own pockets that they have simply been duped by the lying propaganda slogans before the elections, but it is also a lie because the government could do much more for Hungarian consumers did it not try to profiteer off of them even in this situation. Because that is what they are doing. Big time.
It is perfectly clear and obvious that the Fidesz government is in serious financial difficulties because of the freezing of EU funds, which it is still not prepared to unblock simply and easily by repairing the rule of law and, for example, by joining the European Public Prosecutor’s Office. If it did that, life would be much easier for all Hungarians, but it would require a fundamental denial and change of their system based on state-coordinated corruption. In this cash crunch, they seem to be trying to get their hands on every single forint: not taking, of course, from the oligarchs and stooges, who are again being left out of any extra public contributions.
Hardly anyone has noticed, but they are also trying to sneakily profit from the reduction of the utility bills in order to get as much revenue as possible: even though the European Union has given the Member States the opportunity to introduce a reduced tax rate for energy, the Hungarian government is the only one unwilling to take advantage of this. Yes, you get it right: Brussels, with whom we are still at war and which the government believes is the true cause of all evil, has allowed the VAT on energy to be reduced to a minimum, but Fidesz is gently turning a blind eye to this, so that we currently have the biggest tax burden on the public purse. In fact, brace yourselves: the doubling in electricity and the seven-fold increase gas prices is actually good for the government, as the record VAT on record prices means much more revenue than before.
Just to clarify an important chronological point: the European Council of the Heads of State and Government of the European Union, with Viktor Orbán present, had already discussed support for government action against spiralling energy prices as an important agenda item at the Brussels summit last October – almost six months before the bloody invasion of Ukraine – which led to the introduction of a new, reduced VAT rate determination freedom in April.
In other words, it must be stressed again: it is a deliberate and clear lie on the part of the government to portray Russian aggression as the sole cause of the current inflation and energy price explosion. There is a natural amplifying effect of the conflict and its geopolitical consequences, but the economic situation in Hungary, the galloping inflation, the weak and fluctuating forint exchange rate are all fundamentally and inherently the result of the misguided and insensitive economic policies of the Hungarian government and as such, the sole responsibility of Fidesz. As for VAT on utility bills and the possibilities offered by the EU’s discount rate, only the Fidesz government is keeping energy VAT artificially at record levels. In Croatia, it has been halved, in Romania, Spain and Poland it has been reduced to 5 per cent, in Belgium it has been cut from 21 to 6 per cent, in the Netherlands to 9 per cent, and even Luxembourg, the richest small European state, has a lower tax rate on overheads, just 14 percent, even though its minimum wage is the equivalent of HUF 800,000.
If Fidesz needs tax revenue so badly, why do they not clamp down on their oligarchic companies, which are still paying out billions in profits despite the crisis? Why are they always profiteering from the most vulnerable in society? If there is a shred of decency left in the government leaders, they will abolish VAT on gas and electricity with immediate effect, or at least reduce it to 5%. The EU gives them the opportunity to do so, they cannot blame ‘Brussels.’ It is a system of government by decree, with a two-thirds majority in parliament, so they can do whatever they want. If they want it, that is.

István Ujhelyi
Member of the European Parliament
24 July, 2022