Demonstrators block the traffic during a protest on Margaret Bridge in Budapest, Hungary on July 12, 2022. (Xinhua/Chen Hao)
Their effort was in vain as Parliament adopted the motion of Prime Minister Viktor Orban's government in the early afternoon with 120 votes in favor, 57 against and one abstention.
BUDAPEST, July 13 (Xinhua) -- About a thousand people blocked traffic on the Hungarian capital's two bridges on Tuesday to protest the implementation of a new law that is likely to result in a tax hike for potentially hundreds of thousands of small firms and private individuals.
The demonstrators' aim was to deter Parliament from passing the bill into law using the fast-track procedure. The draft of the bill was submitted to Parliament on Monday.
Their effort was in vain as Parliament adopted the motion of Prime Minister Viktor Orban's government in the early afternoon with 120 votes in favor, 57 against and one abstention.
Demonstrators block the traffic during a protest on Margaret Bridge in Budapest, Hungary on July 12, 2022. (Xinhua/Chen Hao)
The protesters were mostly owners of small firms and self-employed so-called individual entrepreneurs, who have so far been able to pay a lump-sum tax under the simplified "Itemized Tax for Small Businesses" regime known by the acronym KATA in Hungary.
Under this regime, KATA taxpayers who earn up to 12 million Hungarian forints (29,700 U.S. dollars) a year paid a flat monthly 50,000 forints instead of corporate or payroll tax. The new law, which is scheduled to enter into force on Sept. 1 this year, increases the ceiling to 18 million forints per year but would no longer allow the KATA regimes to be used for income from corporate customers.
According to the protesters, the modification would "kill" the KATA regime and would force them to switch to more complex and expensive regimes.
The protests come as Orban is facing unprecedented headwinds: inflation in Hungary is approaching 12 percent, a 24-year high, the country's currency (forint) is at record lows against the euro and the U.S. dollar, and the country's access to vital European Union (EU) funds has been blocked over concerns for the rule of law.
About a thousand people blocked traffic on the Hungarian capital's two bridges on July 12, 2022 to protest the implementation of a new law that is likely to result in a tax hike for potentially hundreds of thousands of small firms and private individuals. (Xinhua/Chen Hao)
Tuesday's demonstration was the first major show of disquiet since Orban and his Fidesz party were re-elected in April for a new four-year term.
"I won't be able to issue invoices to my clients," 50-year-old Gabor Muller, a translator, told Xinhua.
"Most of our agents used KATA," commented the owner of an insurance brokerage firm who did not want to be named. "We now will have to find another, much more expensive way to continue working."
A young bicycle messenger, Andras, also said that he was paid under the KATA regime and he did not know how to solve this new problem.
"What infuriates me the most is that the government has failed to consult the affected parties, " he said.
According to the government, the current system has been abused by some businesses, and the new regime would correct this.
Opposition parties have called on the government to withdraw the legislation.
Local business portal Portfolio said that the measure could affect close to half a million people, and was in fact a "very, very big tax increase." (1 U.S. dollar = 413.33 Hungarian forints) ■
