Shops to close on Sundays

As plans to close stores on Sundays are announced a liberal weekly accuses the government of acting mindlessly. A right-wing commentator, on the other hand, believes that the government has a simple and pragmatic reason for the ban: making sure that multinational retail chains will pay taxes.

Minister of National Economy Mihály Varga announced that the government supports the Christian Democratic Party’s proposal on closing stores on Sundays (see BudaPost November 8). The amended draft law stipulates that all stores other than small family run shops will have to be closed for most Sundays. The government also plans to introduce a new regulation which supermarkets that produce losses in two consecutive years will need to suspend their operation. In 2013, all multinational chains dominating the retail market reported losses and paid no corporate taxes.

Magyar Narancs contends that is a mindless idea to close shops on Sundays. The liberal weekly reminds that according to the estimates of the retails chains, 15,000 to 20,000 employers can be dismissed if stores will stay closed for Sundays. As all shops including Hungarian retail chains will be closed according to the amended proposal, Magyar Narancs suspects that the government needs the proposal only to divert attention from the diplomatic disputes it got involved in.

The rationale of the new laws is quite obvious and pragmatic, Zsolt Bayer suggests in Magyar Hírlap. The pro-government columnist points out that through accounting tricks, multinational retail chains with hundreds of million Forint turnover can still produce losses, on paper at least. Hungarian branches pay high rents and fees for their parent companies so that they do not have to report profit and pay corporate tax in Hungary, Bayer suspects. This is bad not only for the budget, but also for Hungarian retail chains who cannot circumvent corporate taxes and so have to compete with foreign chains on an unequal footing, Bayer notes.

Tags: retail trade, taxes