S&P Affirms 'BBB' Rating With Stable Outlook, Finance Ministry Rejects Global Corp Tax

LOCAL NEWS

• S&P affirms Hungary's 'BBB' rating with stable outlook. Analysts project the economy to grow at 6.1% in 2021 & 5.3% in 2022, acknowledging the country's effective vaccine rollout and fiscal stimulus
• Finance Ministry's Tállai says Hungary won't give up its financial sovereignty by introducing a global minimum corporate tax rate.
  • Argued that this would hurt businesses, consumers & economy as a whole. Tállai said the tax would eliminate global tax competition.
  • Hungary's 9% corporate tax rate is the lowest in EU, and this has given the country a clear advantage in the race for international investments. "We will not agree to giving that up,"
  • Tállai noted that govt introduced a new tax policy in 2010, levying temporary special taxes on banks, telecommunications companies, energy companies and retail chains.
  • This generated some HUF 500 billion (EUR 1.4bn) in tax revenue for the state budget over a three-year period. "But these rules were drafted in a way that ensured that they would not threaten the operations or profits of these corporations,"
  • Tállai noted that these taxes were later challenged in the ECJ, which ultimately ruled in Hungary's favor.
  • Govt refuses to impose taxes that will hurt domestic companies and the economy at Brussels's request, and won't do so at the request of Washington either.