The announced special taxes affect eight sectors that the government considers to be winners. In a higher interest rate environment, banks and insurance companies make higher profits partly because deposit interest rates do not follow the increase in loan interest rates, said Dániel Molnár, macroeconomic analyst at Századvég Konjunktúratótátó, to Magyar Hírlap.

According to him, last year Hungarian credit institutions achieved a record profit of eight hundred and twenty billion forints after taxes, even with the credit moratorium. In trade, the increase in the purchasing power of the population creates the scope for raising prices and thus increasing profits.

Dániel Molnár explained that in the case of the energy industry, prices are often driven up by uncertainty and speculation, while cost levels do not change, which results in improved profitability on the part of traders and producers. Airlines are somewhat out of line and international tourism still hasn't recovered.

Viktor Orbán formulated two goals for which the amount received from the special tax is intended to be used: the maintenance of utility reduction and the strengthening of national defense. In the case of the former, the problem is caused by the increase in gas prices, due to which the service provider is forced to sell to the public below the purchase price, a loss that the government must make up for in order to maintain the service - explained the expert, and then added: the strengthening of the national defense is also essential due to the war going on next door , which also requires significant resources.

According to him, the most important question regarding the measure is the company's reactions. The companies will probably try to pass the burden on to the consumers, but the question is, if these companies could raise prices, why haven't they done so so far.

At the same time, the goal of the government cannot be to take away the entire profit, as that would be counterproductive, it would eliminate the incentive that encourages companies to carry out improvements. Above a certain level, however, the amount of profit is socially harmful, as the income generated in this way flows out of the economy through foreign-owned companies, the analyst added.

Source: Magyar Hírlap

Author: Andrea Józó

Photo: Tamás Vasvári