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Hungarians protest over tax hike for small businesses

Thousands of protesters staged a rally on Wednesday, July 13, against legislation pushed through by lawmakers from Hungarian Prime Minister Viktor Orban’s party to increase the tax rate for small businesses.

Demonstrators in the capital briefly blocked traffic and held a rally as the anti-government rally protests continued into its second day after lawmakers fast-tracked legislation sharply raising taxes for small firms.

Prime Minister Viktor Orban’s government submitted the amendments to parliament on Monday (July 11) drastically tightening eligibility for Kata, which many small businesses opted into due to the low administration and low tax rate it offered.

The government says the previous tax system was abused by some businesses forcing workers into the scheme to curb their own costs, facilitating a form of covert employment. The new legislation will affect the country’s independent entrepreneurs who have benefited from a tax scheme that allowed individual contractors to pay a flat rate. The new rules will take effect in September if voted through by the parliament.

Protesting small business owners, however, say the government’s overhaul of the tax system will increase the country’s inflation and affect their income which many see as an unacceptable prospect.

Despite the protest, Orban’s ruling Fidesz party pushed through the legislation and the motion was passed in the parliament on Tuesday, a day after lawmakers had submitted the amendments.

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