Changes to Personal Income Tax Donations Raise Concerns Over Civil Society Funding in Hungary
Proposed legislation affects one percent donations amid allegations of governmental censorship.
The issue of voluntary one percent donations from personal income tax has resurfaced following the Fidesz party's introduction of a transparency law proposal in mid-May. This legislation is believed to provide the government with mechanisms to silence civil organizations and media outlets deemed undesirable by the state.
Under the proposed law, organizations classified as a threat to national sovereignty by the Sovereignty Protection Authority will no longer be eligible to receive these one percent donations from taxpayers.
Such classifications would be determined by the government.
The original proposal indicated that the new restrictions would take effect in the following tax year.
However, an amendment accepted during the legislative process suggests that the law may also apply retrospectively to donations made from the previous tax year.
Taxpayers had until May 20 to designate their preferred recipients for these donations, meaning that any donations made to organizations listed as unsafe by the Sovereignty Protection Authority after August 1 would be redirected to the newly established Batthyány-Strattmann László Foundation for Healing, rather than to the original beneficiaries.
Up until Wednesday afternoon, the proposal was expected to be voted on by parliament the following week.
However, Károly Kocsis, the leader of the Fidesz parliamentary group, announced a postponement of the vote until the autumn parliamentary session to accommodate discussions regarding feedback received on the proposal.
This delay jeopardizes the timeline previously outlined, which could significantly affect the distribution of one percent donations from the previous year.
The proposed legislation requires that civil organizations, in contrast to religious institutions, must receive the total amount from one percent donations by September 30 of the same year.
This timeline raises concerns regarding the potential need to reclaim funds from organizations deemed a threat to sovereignty.
Typically, the earliest date for the autumn parliamentary session in the current cycle is September 25, 2023. If the timeline is not significantly advanced, it will be imperative for lawmakers, the President, the Sovereignty Protection Authority, and the government to act swiftly to ensure compliance with the deadline set for the National Tax and Customs Administration.
Should the law be enacted, it is anticipated that the National Tax and Customs Administration will face increased scrutiny regarding the management of these one percent donations.
Under the proposed law, organizations classified as a threat to national sovereignty by the Sovereignty Protection Authority will no longer be eligible to receive these one percent donations from taxpayers.
Such classifications would be determined by the government.
The original proposal indicated that the new restrictions would take effect in the following tax year.
However, an amendment accepted during the legislative process suggests that the law may also apply retrospectively to donations made from the previous tax year.
Taxpayers had until May 20 to designate their preferred recipients for these donations, meaning that any donations made to organizations listed as unsafe by the Sovereignty Protection Authority after August 1 would be redirected to the newly established Batthyány-Strattmann László Foundation for Healing, rather than to the original beneficiaries.
Up until Wednesday afternoon, the proposal was expected to be voted on by parliament the following week.
However, Károly Kocsis, the leader of the Fidesz parliamentary group, announced a postponement of the vote until the autumn parliamentary session to accommodate discussions regarding feedback received on the proposal.
This delay jeopardizes the timeline previously outlined, which could significantly affect the distribution of one percent donations from the previous year.
The proposed legislation requires that civil organizations, in contrast to religious institutions, must receive the total amount from one percent donations by September 30 of the same year.
This timeline raises concerns regarding the potential need to reclaim funds from organizations deemed a threat to sovereignty.
Typically, the earliest date for the autumn parliamentary session in the current cycle is September 25, 2023. If the timeline is not significantly advanced, it will be imperative for lawmakers, the President, the Sovereignty Protection Authority, and the government to act swiftly to ensure compliance with the deadline set for the National Tax and Customs Administration.
Should the law be enacted, it is anticipated that the National Tax and Customs Administration will face increased scrutiny regarding the management of these one percent donations.
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