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Hungarian construction manufacturers are suffering
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The government imposed a new punitive tax on the sector and it has led to the closing of almost all of the Hungarian brick and tile factories. All the while, employees of said factories are being layed off in mass numbers.
The Hungarian construction sector has been in a nosedive for a while now. The new punitive mine tax only worsens the situation for the factories. The government specifically aimed the new restrictive tax at this industry, which has no choice but to stop production. The industry that already had been in a decline now plummets. The Hungarian brick and tile factories all close their doors to weather the new tax. These cause stutters in production and layoffs in the workforce.
The government aims to make existing in Hungary harder for the big multinational companies. So far it seems to succeed; however, the situation is not as controlled as it could be. The new punitive tax they introduced affects the whole industry, not just the foreign companies. In February, the government brought in a new mining fee that touched on cement production. Now, they extended it to fired brick, ceramics, and tile manufacturers as well.
Read more about Hungarian taxes HERE and HERE.
Taxing the construction sector
Manufacturers with annual revenues exceeding HUF 3 billion (EUR ~8 million) are required to pay 90% of the excess revenue over the government-set price as a punitive tax to the budget. The supplementary mining fee was imposed based on sales prices that were 41% higher than the prices in January 2020. These are significantly lower than the current market prices. This means that manufacturers can only sell their goods at a loss, Zoltán Stocker, President of the Association of Construction, Wood, and Building Material Industry’s Workers’ Union, told SzeretlekMagyarország.
The impact
This adds to the problem of the Hungarian construction material market’s downfall, so companies are resorting to selling out of stock. Production has been interrupted so companies can get rid of their unsold inventory that had accumulated. Most companies reduced or shut down their production completely. This way, there’s no need for the previous three-shift production and they can reduce the workforce too.
This is exactly how fascist manipulation of industry works. It destroys free market competition and economic growth that gives people jobs and lower prices for the goods they buy. Hungary is on a path to misery for the average person but Fidesz will control the electoral system to make sure that they can’t be voted out.