BUDAPEST (Reuters) – Hungary remains opposed to a global minimum corporate tax rate, Prime Minister Viktor Orban told state radio on Friday, citing concerns over jobs in the central European country, which has used its low-tax regime to attract investment.
The minimum tax is the second in a two-pillar agreement reached last year between nearly 140 countries to rewrite the rules of cross-border taxation to better reflect how big internet companies can make profits in low-tax countries.
Hungary has used its 9% corporate tax rate and generous government subsidies to attract large investments from German automakers and Asian battery makers to bolster its export-driven economy.
“This is a job-killing tax hike, which, if implemented with Hungary’s approval, would eliminate tens of thousands of jobs,” Orban said. “The tax issue is not global, it is a national competence.”
Hungary has argued that approval of the plan could harm Europe’s economy, but some European officials have suggested that Budapest is using its opposition as a bargaining chip to gain access to billions in frozen European stimulus funds.
The European Commission approved Hungary’s post-pandemic recovery plan on Wednesday, but said it would not receive any payments – worth a total of 5.8 billion euros – until it has implemented reforms to strengthen judicial independence and fight corruption.
Orban said Hungary’s economy, hard hit by the war in neighboring Ukraine, could grow by 1.5% next year, adding that his nationalist government would continue its efforts to protect households from soaring fuel costs. energy in 2023.
Orban reiterated that Hungary opposes joint EU borrowing to help Ukraine, but said Budapest would provide funding on a bilateral basis.
(Reporting by Gergely Szakacs and Anita Komuves; Editing by Robert Birsel)
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