Hungarians protest for second day against tax reform

Protesters in the Hungarian capital blocked major transport arteries for the second day in a row on Wednesday to protest tax reforms the country’s ruling ruling party passed this week.

Several thousand demonstrators, many of them independent businesses affected by the new changes, gathered in the main square outside the Hungarian Parliament to protest Tuesday’s law that many fear will lead to massive tax increases.

An hour-long blockade of a bridge in Budapest on Tuesday did not prevent the nationalist Orbán government’s proposal to raise the tax rate on hundreds of thousands of small businesses from being approved.

It is estimated that up to half a million workers in Hungary use the tax scheme known as KATA.

The Hungarian government says many companies are abusing the system by hiring contract workers rather than hiring them, depriving the country’s budget of 250 to 300 billion HUF (608 to 730 million euros) of tax revenue each year.

Wednesday’s rally gathered again outside Parliament before protesters chanted “We’ve had enough!” passed through the center of Budapest, temporarily blocking the main transport interchanges and another bridge over the Danube River.

Zsolt Turi, one of the protesters at the rally, said his income would plummet due to a revised tax scheme due to take effect in September, which he described as an unacceptable prospect.

“I will go to the black market… by paying the minimum social security, or I will take my suitcase and leave for the nearest normal country,” he said.

Troubled economy

Re-elected in April, Orban faces his biggest challenge since taking office in 2010, with inflation at its highest level in two decades, the forint at an all-time low and European Union funds in limbo amid debates over democratic standards.

Shrinking gas supplies to Europe and soaring fuel prices following Russia’s invasion of neighboring Ukraine in February have increased pressure on Orban, whose right-wing Fidesz party is still the most popular party in Hungary.

On Wednesday, his government ordered a ban on the export of fuels such as gas and lifted a multi-year cap on utility prices for households with higher consumption, reversing one of the economic policies adopted by the 59-year-old prime minister.

This measure will dramatically increase the price of electricity and gas for households consuming more energy than the average level of consumption.