Sectoral Special Taxes in Hungary as Instruments of a Populist Fiscal Policy: A Legal Analysis

Abstract

In order to meet a variety of locally relevant socio-economic expectations and needs, Hungarian tax policy in the last decade has applied a number of unconventional instruments. The government favored in particular the imposition of additional taxes on corporate taxpayers in specific sectors of the national economy. The taxation of turnover in addition to corporate profits has proved to be a particularly attractive idea. These measures pursue declared objectives which any national government that is faithful to its political mandate could endorse as its own. However, the design of these taxes and their related regulatory hiatuses, which have been subject to extensive scrutiny before the courts of the European Union, raise the possibility of their abusive and discriminatory use to the disadvantage of select individuals, in particular non-national corporate taxpayers. This element of contemporary Hungarian tax policy may well be considered as forming part of the government’s populist policy agenda.