Budapest mayor Gergely Karacsony

Budapest mayor: City to file lawsuit over solidarity tax

The Budapest municipal council will file its lawsuit at the Budapest Municipal Court over the amount payable to the central government in solidarity tax, Gergely Karacsony, the city's mayor, said.

The lawsuit is aimed at enforcing the rights of Budapest residents, Karacsony told a press conference, arguing that the 58 billion forints (EUR 156.9m) in solidarity tax payable to the government was “unlawful” because it was 25 billion more than the funding received by the municipal council.

The city council is seeking immediate legal protection to ensure that the state treasury cannot charge its account until a binding ruling is issued in the case, the mayor said.

Citing international treaties, the constitution and the law on local councils, Karacsony said local councils were eligible for state funding to fulfil their functions.

“The government is digging around in the municipal council’s pockets when it takes away 25 billion forints for the central budget,” the mayor said.

He said he did not believe that the solidarity tax was being used to finance smaller localities, arguing that the money flowed into the central budget “which can be used to finance all sorts of things”.

Karacsony said the issue was not about Budapest not showing any solidarity. “We know full well that being the nation’s capital is a huge responsibility,” Karacsony said.

“It’s the same responsibility we feel when we don’t allow a drop in the quality of Budapest’s services . as Budapest accounts for 38 percent of Hungary’s economic output.”

The nation’s capital fights for its revenues in its own and in the country’s interests, the mayor said.

In response to a question, Karacsony said that if the court ruled in the municipal council’s favour, the issue of local council financing would “fall apart like a house of cards, and then the government will have to rethink the system”.

He said they wanted the court to rule that the government had no right to strip local councils of their own revenues. He added that Budapest winning the lawsuit would be “a very important step towards the protection of the local council system”, adding that it was “also a test to see whether there still remain traces of the rule of law in Hungary”.

He said the city council was hopeful that a binding ruling would be issued in the case before the end of the year.

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