So far, 3 percent of local taxes have been kept from large investments in special economic zones, 20 percent of which are.

“The county government of the county in which the special economic zone is located receives tax revenue […] Up to 17% of the revenue can be used by the county government for its own investments,” so the government will amend the local tax code with a clause included in the 2023 Budget Institution Act.

The mid-2020 law on special economic zones has sparked a lot of controversy According to the local taxes from the regions do not flow to the local governments, but to the counties, and they decide to redistribute the money. However, according to the applicable rules, the county self-government is responsible for the operation of the settlements most directly affected by the investment in the economic zone, its development, etc. You have to spend the money, and the county can keep 3 percent for its own operations.

Under the amendment, 20 percent of local taxes from the special economic zones will now belong to the county.

There are currently three special economic zones in the country:

  • Mosonmagyaróvár Special Economic Zone,
  • Danube Coast – Fajr SEZ,
  • Jodi Special Economic Zone.

Classified with respect to particular large investments, Fides justified directing local tax revenue to the county level on the grounds that such large investments not only affect the particular settlements, but also generate substantial tax revenue for the particular local government. Therefore the revenue should be better distributed in the vicinity of the settlement, and this task was entrusted to the self-governments of the county.

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Fidesz, without exception, has a majority in county governments, while this is not the case for local governments.

District municipalities currently have primarily administrative and coordinating functions, and local development has usually remained the responsibility of local governments – unless the state, i.e. government, involved projects, which is something that happens regularly, especially for large investments.

Meanwhile, Mate Kochis, the leader of the Fides faction, according to the Statute Amendment Counties may rename counties to counties.




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