Budapest Mayor Gergely Karacsony – Photo: Facebook

Karacsony calls on govt to withdraw decree on special economic zone

Budapest Mayor Gergely Karacsony has called on the government to withdraw a decree designating the city of Dunaujvaros and surrounding municipalities in central Hungary a special economic zone.

Speaking after a board meeting of the alliance of local governments (MOSZ) in Budaors, on the outskirts of Budapest, on Tuesday, Karacsony, who is a co-leader of the alliance, said MOSZ considered the special economic zones established by the government “arbitrary and unfair” and believed that they were in conflict with Hungary’s system of local councils.

Karacsony said Dunaujvaros was already in a difficult situation, adding that the decree on the special economic zone which goes into effect on July 1 would deprive the city of a significant amount of business tax revenue this year alone.

Another reason why the government’s decree was “unacceptable”, he said, was because the industrial areas in the region had been established through agreements between Dunaujvaros and its neighbouring towns.

Dunajuvaros, Karacsony said, had already contributed 1.5 billion forints (EUR 4.3m) in “solidarity taxes” to the state budget, arguing that the city had already shown solidarity towards the nearby towns with less business tax revenues.

“Interestingly enough it’s only opposition-led cities that end up in this situation,” he said, noting that the city of God, on the outskirts of Budapest, had also been reclassified as a special economic zone. “And there’s no telling where the reductions to local council tax revenues will stop,” Karacsony added.

Meanwhile, Judit Foldi Racz, a board member of the opposition Democratic Coalition, told a press conference that her party would “restore the rights” of local councils if the opposition wins next year’s general election. The areas falling under the special economic zone “will be controlled by Fejer County’s Fidesz leadership”, she said, adding that this meant that companies operating in the area would pay their business tax to the county local council.

“This will deprive the opposition-led Dunaujvaros of billions in tax revenue,” Foldi Racz said. “The city will have no say in any planned investment projects either, because those too will fall under the authority of the county local council.”

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