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Ryanair Calls Hungarian Windfall Taxes ‘Unjustified’ and ‘Ill-Advised’

Júlia Tar 2022.06.09.

Ryanair called on Prime Minister Viktor Orbán’s government on Wednesday to scrap the new tax levied on departing passengers as part of efforts to rein in a rise in the budget deficit, Reuters reports.

As we have reported, new windfall taxes were introduced by the Orbán government, worth 800 billion forints (EUR 2 billion) on “extra profits” earned by banks, energy companies, and other firms last month.

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The Prime Minister said earlier that banks, insurance companies, large distribution chains, energy and trading companies, telecommunications companies, and airlines would be obliged to pay “a large part of their excess profits” into those two funds.

The new funds will finance the government’s public utility cut program and development projects for the military, Orbán said. He added that the new measures would apply for 2022 and 2023.

The new levy on the airline industry involves a tax worth 10 to 25 euros on passengers departing Hungary from July, Reuters writes.

“This unjustified tax on the airline sector (which has been heavily loss-making for the last two years) will be damaging for Hungarian tourism and the economy, which is dependent on air carriers to provide connectivity, tourism, and jobs,” Ryanair stated, adding that “This ill-timed and ill-advised ‘extra profits’ tax which inexplicably compares the loss-making aviation industry with hugely profitable oil and energy companies, has instantly made Hungary uncompetitive and less attractive to airlines and tourists.”

Ryanair also told Reuters that the new tax would be forced to move growth capacity to countries that are working to restore traffic.

Ryanair is not the only one who is dissatisfied with the decision. Last month, Wizz Air said it would take a long time for the airline industry to return to revenue and profitability levels seen before the pandemic and the tax would hamper the recovery of the tourism sector.

Ryanair to Restart Budapest Services to 40 Destinations
Ryanair to Restart Budapest Services to 40 Destinations

Low-cost airline Ryanair will restart its Budapest services to 40 destinations starting on July 1. The company said on Thursday that the lifting of quarantine regulations introduced as a result of the novel coronavirus in Hungary has enabled the restart of services. The destinations to be serviced from Budapest will include Italian, Spanish, Portuguese and […]Continue reading

Reuters also mentioned that Magyar Telekom cut its 2022 profit guidance on Sunday as a result of the new taxes on businesses, while banks in Hungary said the levies could harm their lending capacity. OTP Bank said the new tax would cost them 78.3 billion forints (EUR 199 million) this year alone.

Featured image: illustration via Pixabay


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