New taxes on food products reduce competitive chances

By: trademagazin Date: 2012. 01. 30. 02:03

It is too early to predict the consequences of the public health product fee (NETA) – we heard at the food processing conference recently held in the German and Hungarian House of Economy. According to ÉFOSZ (Federation of Hungarian Food Industries), the new tax is already being drastically increased and its scope is being expanded just one month after its entering into force. ÉFOSZ’s opinion is that the tax only seemingly generates new revenues for the budget, in reality it will deepen the crisis of the sector and jeopardise jobs. If the processing industry decided to shift the burden of the new tax to consumers, it would increase prices by 10 percent, which could set back sales as much as 20 percent. This would inevitably result in employees made redundant and a boom on the black market as the same products could easily be imported from neighbouring countries and sold illegally at a lower price. As of 2012 the food sector will also be hit hard by the two-percent increase in VAT. Tamás Éder, the president of ÉFOSZ told our magazine that the primary goal of imposing the new task was increasing budget revenues – in 2011 with HUF 2.4 billion.

Related news