Ryanair urges Hungary to scrap new tax on airline passengers
08/06/2022 11:21
BUDAPEST, June 8 (Reuters) - Ryanair RYA.I called on
Hungarian Prime Minister Viktor Orban's government on Wednesday
to scrap what it called a "misguided" new tax levied on
departing passengers as part of efforts to rein in a rise in the
budget deficit.
Orban's government announced new windfall taxes worth 800
billion forints ($2.19 billion) on "extra profits" earned by
banks, energy companies and other firms last month, hitting
Budapest stocks and rattling investors. urn:newsml:reuters.com:*:nL2N2XI0BI
The measures are needed to finance Orban's costly policy of
keeping a lid on household utility bills at a time of surging
global energy prices as well as tax rebates and other measures,
which helped Orban get re-elected in an April landslide.
The new levy on the airline industry involves a tax worth 10
to 25 euros on passengers departing Hungary from July.
"This unjustified tax on the airline sector (which has been
heavily loss-making for the last two years) will be damaging for
Hungarian tourism and the economy, which is dependent on air
carriers to provide connectivity, tourism and jobs," Ryanair
said in a statement.
"This ill-timed and ill-advised 'extra profits' tax which
inexplicably compares the loss-making aviation industry with
hugely profitable oil and energy companies, has instantly made
Hungary uncompetitive and less attractive to airlines and
tourists."
A Hungarian government spokesman did not immediately respond
to emailed questions for comment.
Ryanair said in response to the new tax it would be forced
to move growth capacity to countries that are working to restore
traffic.
Rival carrier Wizz Air WIZZ.L said last month it would
take a long time for the airline industry to return to revenue
and profitability levels seen before the COVID-19 pandemic. It
said the tax would hamper the recovery of the tourism sector.
Deutsche Telekom DTEGn.DE unit Magyar Telekom MTEL.BU
cut its 2022 profit guidance on Sunday as a result of the new
taxes on businesses, while banks in Hungary said the levies
could harm their lending capacity. urn:newsml:reuters.com:*:nL8N2XS0GU urn:newsml:reuters.com:*:nS8N2WO0H2
Central Europe's largest independent lender, OTP Bank
OTPB.BU , said the new tax would cost it 78.3 billion forints
this year alone.
($1 = 364.8100 forints)
(Reporting by Gergely Szakacs
Editing by Bernadette Baum)
((gergely.szakacs@thomsonreuters.com ; https://twitter.com/szakacsg
; +36 1 882 3606 ; https://reut.rs/3pHWT1v))