Finance Minister Mihály Varga said the municipal court of appeals of Budapest has ruled that the city of Budapest cannot be exempted from certain tax payments, adding that the treasury had already collected 2 billion forints (EUR 5m) in tax arrears from the city’s account. Minister Varga said that with this latest deduction, a total of 30 billion forints owed to the treasury has been collected from the city.
Meanwhile, the finance minister insisted that Budapest was bankrupt. While the municipality received 102 billion forints in tax revenues in the first four months of the year, its funds dwindled to 9 billion forints by the end of April, its debt portfolio swelled by 30 billion forints, and the city still owed the treasury a further 5 billion forints in unpaid taxes, he said. “Left-wing fake reports blame the government for the city’s empty coffers, but the facts refute this: in the past five years Budapest received over 1,200 forints in tax revenues and state support, while it was expected to pay a solidarity tax of 188 billion to assist poor municipalities,” the minister said. The city of Budapest administration sued the government last September, seeking a reduction in the solidarity tax, and it was granted legal protection for the duration of the proceedings. In November the city filed a complaint because the treasury had collected 5.6 billion forints from its account despite the legal protection.