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Environmentally harmful measures in Hungary. Zoltán Szabó Clean Air Action Group, Hungary. Transport – road construction programmes. In 2004 the government plans to spend 260 billion HUF (1 billion Euro) on the construction of new motorways. - PowerPoint PPT Presentation
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Environmentally harmful measures in Hungary
Zoltán Szabó
Clean Air Action Group, Hungary
Transport – road construction programmes
• In 2004 the government plans to spend 260 billion HUF (1 billion Euro) on the construction of new motorways.
• In Hungary heavy trucks cause about 300 billion HUF of unpaid damage yearly (damage to roads, buildings, utilities; environmental pollution, health effects, accidents).
Existing and Planned Motorways in Hungary
Yellow – places which can be reached in less than 15 minutes from the motorway
Orange – places which can be reached in less than 30 minutes from the motorway
19881988
20032003
20062006
20152015
Road surface strengthening program, regional airports
• Aim: to raise the axle-load standard bearing capacity of main roads from 10 to 11.5 tons as required by the EU– Road strengthening is needed by less than 0.1% of the road users
– by the heaviest trucks and buses– Cost: 1200 million Euros – Hungarian and EU taxpayers’ money
(first phase approved by ISPA) • Plan to develop 13 regional airports mainly by taxpayers’
money• Railways are continuing to deteriorate
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Consumer price index
Price of unleaded petrol 95
The consumer price index andthe price of unleaded petrol in Hungary
1991=100
0
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Taxes unpaid by foreign trucks
Total unpaid taxes for the years
1992-2001: 2,8 billion Euros
Budget cut for public transport
• Government plans:– to shift reduced VAT rate of public transport to normal rate– decrease the state support to students and pensioners
• Insufficient public investment in railway infrastructure• Budapest Public Transport Company needs to be
financially consolidated each year
A petition was handed over to State Secretary: concern about the reduction of state support for railways and public transport
Company car taxation
• Use of company cars for personal purposes to evade paying personal income tax and social security tax:loss of state revenue: more than 600 billion HUF/year
(2,3 billion Euro)Compare this with the 11 billion HUF revenue in 2004
from the newly introduced energy tax!• 75-95% of executives has got a company car, accompanied
mostly with ‘unlimited petrol bills’• Regressive rate in company car taxation
Good news: 100% increase in tax rate from 2004
Aviation – Malév’s bilateral agreement with East-European
countries• Hungary’ derogation of noise standards• Malev’s bilateral agreement with East-European
countries (Russia, Ukrain, Moldova, etc.)• Noisy aircrafts can land in Hungary regardless of their
noise emission• Citizens living around Ferihegy airport bear the external
costs of noise• Malev’s passengers to East-Europe have increased by
22% in Jan-Aug 2003
Government programme for truck fleet change
• Road hauliers can apply to the Ministry of Economy and Transport for subsidy of purchase of trucks
• The programme is open for SMEs
• Its aim is the reduction of the burden on the environment caused by road haulage
• ‘Environmentally friendly’ trucks
• Budget of 2 billion HUF (almost 10 million Euro)
Reduced VAT rate for pesticides and fertilisers
• There is a lower (12 per cent) VAT rate to artificial fertilizers, insecticides and herbicides
• Producing artificial fertilizers is an extremely energy-intensive process
• Application of increasing quantities of nitrogen fertilizers– from 263 thousand tons in 1999 it went up to 275 thousand tons
in 2001– while the amount of manure used diminished from 3920 thousand
tons to 2869 thousand tons in the same period
Our proposal: Raising to 25 per cent the VAT rate applicable to artificial fertilizers and some other products
Taxes in OECD Member countries levied
on Non-point sources of water pollution
country type Tax rate
Belgium pesticides 0,248€ € per gram active substance
Denmark Insecticides, Chemical products for disinfection of soil, Herbicides, Fungicides, Chemical products for reduction of plant growth
25-35% of retail value including excise duty but excluding VAT
Finland Pesticides 840€ for market entrance + 35% of price (excl. VAT)
Norway Pesticides 0,186€/daa
Sweden Pesticides 0,216€ per whole kg active constituent
France General tax on polluting activities 380-1670€ per tonne
Source: OECD/EU Database on Environmentally Related Taxes, 2001
Pesticides
Taxes in OECD Member countries levied on Non-point sources of water
pollution:
country type Tax rate
Denmark Nitrogen used by households 0.6712€ per kg
Sweden Artificial fertilisers -- nitrogen part 0.1945€ per kg Nitrogen
Sweden Artificial fertilisers -- cadmium part 3.2414€ per g Cadmium
Source: OECD/EU Database on Environmentally Related Taxes, 2001
Artificial fertilisers
Housing policy
• Reduced rate loans for purchase of new houses - higher for existing ones
• New houses are built mostly in green areas• Tax rebates for new houses
Proposals for an environment-saving housing policy in Hungary, which helps citizens feel secure and lead a normal life– At least 50 per cent of the subsidies to the renovation of existing
buildings and the revitalization of public areas– At least 70 per cent, construction of new flats on brown fields– Homeowners be encouraged by tax allowances (VAT and personal
income tax) to spend on the renovation of existing buildings– Proceeds of the sale of real properties should be given the same tax
allowances in the case of renovation as in the case of purchase of new flats
Recent developments• Environmental load fee on air, water and soil pollution.• A new energy tax was introduced in accordance with the EU directive,
but it will be 40% higher than required by the directive.• The VAT on electricity was raised from 12% to 25%.• The annual car tax was raised by more than 20%.• The tax on company cars raised by 100%.• A 25% VAT was introduced for construction areas (until now no VAT
existed for these), which might stimulate a little more the rehabilitation of old buildings instead of construction in green areas.
• A new type of registration tax was also introduced which disfavours the buying of old cars.
• The personal income tax was reduced, however its positive effects are neutralized by an increase in the social security tax.
There is also a very negative result of all the positive changes: the extra revenues will be used to build new motorways
Some solutions
Parking fees Road pricing (see London) More funds for
• public transport• cycling• pedestrianization of streets• traffic calming• revitalization of urban space (brownfields)
Tax on green area conversion
Sources of additional revenuesin billion HUF (1 Euro=250 HUF)
Introduction of urban road charges in Budapest 40 40
Infrastructure charge – on domestic users 30 30
Infrastructure charge – on foreign users 35 35
Ton-kilometre charge to offset extra load on infrastructure
18 18
Uniform rates of daily travel allowances 6 6
Stricter rules and abolition of expense accounting for motorcar use
2o 2oo
Increased taxes on company cars 2o 2o
Sources of additional revenues – continued
in billion HUF (1 Euro=250 HUF)
Reallocation of funds estimated for the construction of new motorways and high-speed roads
90 90
Cancelling subsidies to the Formula-1 Hungarian Grand Prix
3 3
Collection of VAT on the passenger-kilometre performance of foreign buses
5 5
Increase of air tolls to the rate prevailing in the EU
9 9
Introduction of airport utilization fees 1 1
Sources of additional revenues – continued
in billion HUF (1 Euro=250 HUF)
Cancelling subsidies to regional airport investments
2 3
VAT rate reclassification of artificial fertilizers and pesticides
3 3
VAT rate reclassification of disposable diapers 1 1
Increased mining tax (hydrocarbon) 40 40
Increased mining tax (other than hydrocarbon) 3 3
Raising the rate of land protection fees 20 30
Extending the scope of land protection fees 10 20
Total (additional revenues) 1393 1763
Target area of additional expendituresin billion HUF (1 Euro=250 HUF)
Reduction of social security contribution 300 300
Family-related social welfare allowances 15 15
Transformation of the housing policy 130 130
Environmental and health protection awareness raising, information supply, education and training, culture
25 25
Compensation for increased energy prices (electricity and natural gas)
50 50
Energy efficiency schemes (from mining tax) 30 30
Subsidies to public transport in Budapest (from levied urban road charges)
40 40
Subsidies to public transport (from imposed parking fees)
20 30
Target area of additional expenditures – continuedin billion HUF (1 Euro=250 HUF)
Improvements in railway services 100 100
Subsidies to agrarian environment protection (allocating increased funds for the Ministry of Agriculture and Rural Development)
20 20
Total (additional expenditures) 1166 1197
Thank you for your attention
www.levego.hu
Clean Air Action Group Zoltán Szabó
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