Debrecen4U
October 9, 2026
Balance Between Shared Tax Burden and Cities’ Own Interests Discussed at Budapest Economic Forum 2026
BMW in Debrecen and Audi in Győr are among the main drivers of their cities’ local economies. At the same time, Hungary’s major cities are paying increasingly large sums into the central budget. Finding the balance lie between sharing the tax burden and protecting cities’ interests was one of the issues debated by city leaders at the 2026 Budapest Economic Forum. Médiacentrum Debrecen asked city leaders for their views on the solidarity contribution.
The relationship between cities and the government was a key topic at the 2026 Budapest Economic Forum. One panel discussion focused on Budapest, as well as Győr, Székesfehérvár and Debrecen. “Economically, these provincial cities rank among the top ten in Hungary across the board. They pay the highest solidarity contributions, which reflects the strength of their local economies. Unemployment may be at its lowest in these cities, and they have attracted significant investment in recent years. These are the main criteria we consider when selecting the cities,” explained Károly Beke, an analyst at Portfolio.
The panel also discussed the possibility of further expansion at BMW’s Debrecen plant. Lajos Barcsa, Deputy Mayor of Debrecen, said BMW had purchased a 400-hectare site from the local authority at the time, providing room for potential expansion alongside the existing plant. According to Barcsa, Debrecen could eventually be home to a factory on a scale comparable to Audi’s facility in Győr.
He was also asked whether he would still support battery-plant investments following criticism and regulatory fines involving such facilities. “I believe the question should not be whether we need battery plants, but whether we need an automotive industry in Hungary. If we don’t, we can indeed get rid of battery plants as well. But if we do, we need to consider how these factories can be inspected more frequently and more rigorously,” Barcsa said.
In recent days, Debrecen and the Association of Cities with County Rights have also held talks with the government about the solidarity contribution system. They propose capping the contribution at no more than 15 per cent of the previous year’s local business tax revenue. Meanwhile, the government has reached an agreement with Budapest on a one-off state subsidy of HUF 120 billion. This will enable the capital to pay its solidarity contribution in full and settle outstanding bills from previous periods.
Médiacentrum Debrecen also asked Gergely Karácsony, Mayor of Budapest, about the issue. “Local authorities are right to expect the solidarity contribution system to be reformed, including a reduction in the amount payable. Clearly, this is the most immediate and urgent issue. The entire system needs to be restructured; it must not become a tool for plugging holes in the central budget. This money needs to remain within the local government system,” Karácsony stated.
In Győr, the local business tax rate currently stands at 1.6 per cent, reflecting an agreement reached between the city and Audi ten years ago. The city leadership does not want to increase the tax but, over the past decade, around HUF 80 billion has been paid into the central budget through solidarity contributions. Meanwhile, the reduction in the tax rate over the same period has left HUF 53 billion in the hands of local businesses.
Bence Pintér said the city did not want to change this tax policy, while maintaining Audi’s competitiveness was also an important consideration. “If we raise taxes, this will put us at a competitive disadvantage when it comes to securing production capacity for the coming years. We should only have to raise taxes if the government continues to take our money away. And I believe it is not just in Győr’s interest for Audi Hungaria to remain competitive within the group; it is in Hungary’s national interest too,” Pintér said.
According to András Cser-Palkovics, the debate over the solidarity contribution is only one part of the broader question on the role local authorities should play in the future. The Mayor of Székesfehérvár believes municipalities are responsible not only for providing mandatory services but also for playing an important role in the lives of local communities, including by supporting culture and sport. This, however, requires predictable and adequate funding. “What needs to be decided in this country – and I hope that, as a result of these negotiations, we will be able to put forward proposals and move in this direction – is what responsibilities municipalities are expected to fulfil, and within what funding framework they will be able to do so,” Cser-Palkovics said.
The economic summit also addressed a range of other topics, including Hungary’s economic performance and outlook for the coming years.
Source and photo credit: debrecen.hu
