Hungary’s poultry industry calls for equal VAT for pork, poultry meat
On 21 April, Hungary’s Minister for National Economy Mihály Varga announced that, in 2016, the value-added tax (VAT) on pork meat would be lowered from the current rate of 27% to 5%.
However, the rate for poultry meat is set to remain at its current level of 27%, a move which has spurred criticism from representatives of the country’s poultry industry.
Hungary’s State Secretary András Giró-Szász told local news agency MTI that the government had made a decision to lower the VAT rate because local households spend more on pork than on poultry meat. In addition to this, the government aimed to combat tax evasion in this sector, the official said.
According to the Poultry Products Council, this will put the country’s poultry industry at a disadvantage compared with the pork sector. On average, Hungarians consume 32kg of poultry meat and 28kg of pork per capita annually, according to data released by the industry association.
Budapest estimated that lowering the VAT on pork would allow Hungarian consumers to save an estimated HUF 25bn (€81.6m) per year, said Varga, according to a statement released by the Ministry for National Economy.
Following the statement by the Poultry Products Council, Hungarian Prime Minister Viktor Orbán reacted to its request during his visit to the egg production plant operated by local firm Mizsetap in Lajosmizse, Hungary.
"Your request is appreciated and reasonable, but every such reduction is just another step in the dark," Orban was quoted as saying by the Prime Minister’s Office. Orbán added that there will be a "trial period" to verify whether the reduced VAT on pork is an effective measure, following which the government will "seriously consider" the state of Hungary’s poultry industry.
Varga said that the VAT cut on pork was enabled by the government’s expectations of a robust economic growth which would allow for tax cuts. In 2016, Budapest forecasts economic growth of 2.5%.