Government Decree Halts Municipal Tax Challenges
The Hungarian government, led by Prime Minister Viktor Orbán, issued a decree on February 3, 2026, effectively terminating all ongoing court cases challenging a municipal 'solidarity contribution tax'. The decree, identified as Government Decree 15/26 (II.3), mandates that courts cease litigation related to the levy and declares that the tax cannot be subjected to administrative litigation or immediate legal protection. This action has drawn immediate and strong criticism from human rights organizations and opposition figures, who argue it undermines the rule of law and judicial independence.
The Contested 'Solidarity Contribution Tax'
The 'solidarity contribution tax' was initially increased in 2023 with the stated aim of redistributing funds from wealthier municipalities to the national budget. However, the tax has been a source of significant contention, particularly for opposition-led local governments. The city of Budapest, among other municipalities, filed legal challenges against the tax, arguing its unlawfulness. Prior to the decree, courts had, in some instances, sided with the municipalities. In November 2025, the Curia, Hungary's highest judicial authority, upheld a Budapest Metropolitan Court decision that found the Hungarian State Treasury had illegally taxed the capital 28.3 billion forints, plus 6 billion forints in interest. Similarly, in January 2025, a Budapest court ruled in favor of the city's administration, declaring previous tax collection orders unlawful.
Widespread Condemnation and Rule of Law Concerns
The government's decree has been met with widespread condemnation. Human Rights Watch (HRW), in a statement on February 12, 2026, described the move as a 'dangerous precedent' that undermines the separation of executive and judicial powers, calling it a 'severe blow to the rule of law' and 'authoritarian overreach'. HRW urged the government to revoke the decree and reinstate 'access to judicial review' for municipalities.
Budapest Mayor Gergely Karácsony also voiced strong opposition, calling the decree a 'direct attack on the rule of law' and an 'unjust and unlawful solidarity contribution'. Karácsony stated that the government's action sets a concerning precedent where it can dismiss court cases likely to rule against its interests. He has also appealed to the European Commission to examine potential steps to safeguard legal standards in Hungary. The opposition TISZA party accused the government of following the 'Belarusian path', suggesting Hungary is becoming an autocracy. The Hungarian Helsinki Committee highlighted that the decree violates the core legal principle of the separation of powers.
Political Context and Emergency Powers
The decree was issued using emergency powers that the Hungarian government granted itself in 2022, following Russia's invasion of Ukraine. This development occurs just weeks before parliamentary elections scheduled for April 12, where Prime Minister Orbán's Fidesz party faces challenges. The European Union has previously raised concerns regarding the rule of law in Hungary, and this latest move is expected to intensify scrutiny from international bodies.
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