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Hungarians protest for second day against tax overhaul

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By Euronews  with AP, Reuters
A flag reads "democracy, rule of law, republic" as demonstrators in Budapest protest against a tax overhaul on Wednesday, July 13, 2022.
A flag reads "democracy, rule of law, republic" as demonstrators in Budapest protest against a tax overhaul on Wednesday, July 13, 2022.   -   Copyright  AP Photo/Anna Szilagyi

Protesters in Hungary's capital blocked main traffic arteries for the second day in a row Wednesday in opposition to a tax overhaul pushed through this week by the country's right-wing governing party.

Several thousand demonstrators, many of them independent entrepreneurs affected by the new changes, gathered in a main square beside Hungary's parliament to protest a law passed Tuesday that many fear will result in significant tax hikes. 

An hours-long blockade of a bridge in Budapest on Tuesday failed to derail the approval of a motion by nationalist Orban's government to increase the tax rate for hundreds of thousands of small businesses.

Estimates suggest up to half a million workers in Hungary use the tax scheme known as KATA.

Hungary's government says many companies have abused the system by having workers on contracts rather than employing them, thus depriving the country's budget of between 250 and 300 billion Hungarian forints (€608 million to €730 million) in tax revenues annually.

Wednesday's rally again gathered outside parliament, before protesters chanting "We've had enough!" marched across central Budapest, temporarily blocking main traffic junctions and another bridge over the River Danube.

Zsolt Turi, one of the protesters at the rally, said his income would fall sharply under the revised tax scheme, set to take effect in September, which he called an unacceptable prospect.

"I will go into the black market ... paying the minimal social security, or I will grab my suitcase and leave for the nearest normal country," he said.

Worrying economics

Re-elected in April, Orban is facing his toughest challenge since taking power in a 2010 landslide, with inflation at a two-decade high, the forint at record lows and European Union funds in limbo amid a dispute over democratic standards.

A tightening of gas supplies to Europe and soaring fuel costs since Russia's invasion of neighbouring Ukraine in February have added to pressure on Orban, whose right-wing Fidesz is still by far the most popular party in Hungary.

On Wednesday his government ordered an export ban on fuels like gas and scrapped a years-long cap on utility prices for higher-usage households, rolling back one of the 59-year-old prime minister's signature economic policies.

The measure will sharply increase electricity and gas prices for households using more energy than average consumption levels.