Based on the 2017 Central Budget Act, the financial system of the local governments was supplemented by a new source: the solidarity contribution, which is paid to the central budget by a proportion of municipalities with a high per capita tax burden and is aimed at improving equal opportunities.
In addition to this, the 2025 Central Budget Act provides for the payment to the Regional Development Fund of the local business tax surplus of the local municipalities paying the solidarity contribution in excess of the solidarity contribution surplus.
The Regional Development Fund was established toon 1 January 2025 to implement the overall regional development policy, strengthening regional cohesion, reducing regional disparities in development, improving territorial competitiveness, creating conditions for sustainable development, promoting the spatial diffusion of innovation, and equal access to public services. The Fund provides financial support for the achievement of regional development objectives. It is likely that the introduction of the payment obligation of local business tax surplus also contributed to the fact that several municipalities decided to increase certain local taxes from 1 January 2025.
By Lidia Suveges, Attorney at law, KCG Partners Law Firm
