BUDAPEST (Reuters) – About 1,000 demonstrators blocked a bridge in central Budapest on Tuesday as parliament debated a motion by Prime Minister Viktor Orban’s government that would increase the tax rate for hundreds of thousands of small firms, a Reuters journalist said.
The demonstrators initially gathered at a main square outside parliament before marching to a nearby bridge over the River Danube, blocking traffic in both directions between the two sides of Budapest amid a heavy police presence.
Nationalist Orban is facing his toughest challenge yet since taking power in a 2010 landslide, with inflation at its highest in two decades, the forint plumbing record lows and European Union funds in limbo amid a row over democratic standards.
Orban’s government submitted the amendments to parliament on Monday, drastically tightening eligibility for the simplified tax regime, which many small businesses opted into due to the low administration and low tax rate it offered.
However, the government says the system was abused by some businesses forcing workers into the scheme to curb their own costs, facilitating a form of covert employment.
The new rules are set to take effect in September, pending parliamentary approval. The tax had been due to raise 237 billion forints ($572 million) this year.
($1 = 413.66 forints)
(Reporting by Anita Komuves; Writing by Gergely Szakacs; Editing by Catherine Evans and Angus MacSwan)
