A tax has to be paid for the crisis

At the press conference of Magyar Nemzeti Bank it was said that if the companies who have to pay the special tax decide to transfer the extra burden to consumers, inflation will grow by 1 percent. From the sectors that have to pay the special tax let us examine retail. We can see that in 2010 prices are unlikely to change drastically. The special tax has to be paid mainly by foreign-owned large hypermarket chains. Tesco, Spar and Auchan will pay the bulk of the HUF 30 billion tax – if they increase prices to compensate for this, they will improve the market position of their competitors, Hungarian chains such as CBA, Coop and Reál that do not have to pay the tax. Certain suppliers are already complaining that the burden of the special tax is transferred to them and the Central Agricultural Office already imposed fines on Penny Market (HUF 109 million) and Lidl (HUF 155 million) at the end of the summer. It is true that hypermarkets find a thousand ways to ‘hide’ the effects of the special tax: the tax burden is only one of the price-influencing factors and the National Retail Association rejected the complaints of suppliers. They also emphasised that the pre-tax result of the retail sector was HUF 33 billion loss in 2009. The association has declared several times that in the present economic situation the crisis tax burden cannot be transferred to customers or suppliers. Foreign-owned and Hungarian retail chains invested HUF 1,000 billion in Hungary in the least five years and the biggest chains employ tens of thousands of people. If further austerity measures can be expected, for instance shorter opening hours, chains will have to start thinking about whether to leave this rather small market or to stay.