Painful tax increases coming in Hungary: petrol, cigarettes and more to cost
From this January, Hungarians will face notable tax increases: excise duties on petrol, tobacco products and alcohol are set to rise—more steeply than previously expected. The cause is not global oil prices or a new round of government austerity, but rather an unseasonably cold May combined with a peculiar method of calculation. The story began last autumn, when the government decided to implement inflation-linked tax increases. Under the new rule, a number of levies—including excise duties, company car taxes,
vehicle taxes and certain fees—will automatically increase each 1 January in line with the inflation rate measured in the previous year. The intention was to remove the need for annual legislation. The twist lies in how the rate of tax increases is determined: it is not based on annual or year-end average inflation, but solely on data from the preceding July, according to HVG. This method carries a clear risk—if inflation spikes in July for any reason, it automatically triggers higher tax increases