Hungary to impose new tax on car insurance

The Hungarian government plans to impose a new tax on vehicle owners. The rate of the new 'accident tax’ would be 30% of the current compulsory vehicle liability insurance and although it would be payable by the car owners, the collection would be the responsibility of the insurer. 'Chips tax' on food items deemed unhealthy is to be raised and base extended.

The government hopes to collect HUF 27 billion from the new levy in 2012. Collecting the tax will be the responsibility of the insurance company, which means that even if the car owner does not pay, the insurer must pay the tax into state coffers.

The cabinet also plans to raise the so-called 'chips tax’, a fee imposed on products authorities deem unhealthy. In line with previously leaked information, the tax would go up to HUF 7 / liter from HUF 5 on soft drinks, to HUF 150 / kilogram from HUF 100 on packaged sweets and to HUF 250 / kg from HUF 200 on salted snacks.

The tax would also be extended on flavored beer (HUF 35 / liter), alcoholic drinks (HUF 100 / liter) and coffee (HUF 250 / kg). These are expected to boost budget revenues by HUF 15 billion annually.