Hungary’s Solidarity Tax Decree Challenged by Courts & Bar Association

Orban Government Moves to Halt Legal Challenges Over ‘Solidarity Tax’

Budapest, Hungary – February 6, 2026 – Hungary’s Prime Minister Viktor Orban has invoked emergency powers to terminate a lawsuit brought by the city of Budapest over a disputed “solidarity tax,” a move denounced by the city’s mayor as an attack on the rule of law. The decree, issued on Tuesday, effectively prevents further legal challenges to the tax, which has been a source of financial tension between the central government and the capital.

The government decree, published in the official gazette, states that the “solidarity contribution” imposed on local governments “cannot be the subject of legal dispute” and must be collected in full. It cites previous rulings by Hungary’s Constitutional Court as justification, claiming the mechanism is compatible with the country’s Fundamental Law and does not infringe on municipal autonomy.

Budapest’s Mayor Gergely Karacsony condemned the move as a direct assault on judicial independence, particularly as Hungary approaches parliamentary elections on April 12. “No longer even caring about pretences, the government has directly attacked the rule of law,” Karacsony said in a Facebook post, adding that the government intends to prevent the city from “fighting in the courts against the extremely unjust and unlawful solidarity contribution.”

The dispute over the “solidarity tax” contributed to a recent downgrade of Budapest’s credit rating by Moody’s. The European Union has also suspended billions of euros in funding to Hungary due to concerns over Orban’s controversial rule-of-law reforms, impacting the nation’s economy.

The decree instructs courts to scrap cases challenging the tax, arguing that the calculation, collection, and accounting of the contribution are merely technical steps in executing the central budget and therefore not subject to administrative review. According to Karacsony, the government is asserting the power to unilaterally decide legal outcomes through decree.

However, not all courts are immediately complying with the government’s directive. In a case involving Szigetszentmiklós, a judge opted to postpone the proceedings rather than dismiss it, rescheduling the hearing for March 19.

More significantly, the Budapest Tribunal, presiding over the case between the capital and the Hungarian state, issued a statement on Thursday raising constitutional concerns about the government’s decree. The court stated that the decree “violates the principle of legal certainty, the rule of law, the right to legal remedy and the independence of the judiciary, as well as the prohibition of retroactive effect,” and announced its intention to initiate a constitutional review of the measure.

Despite the court’s concerns, it confirmed it would proceed with a scheduled hearing on March 16. The court also informed both the capital and the Hungarian State Treasury of its decision.

The Kúria, Hungary’s highest court, responded to inquiries about the situation by stating that judges in ongoing cases are bound only by the law and are not subject to instruction. “According to Article 26. (1) of the Fundamental Law, judges in Hungary are independent and subject only to the law in their judicial activities,” the Kúria stated.

The Hungarian Bar Association also weighed in, issuing a statement on Thursday asserting that the government’s decree “violates the principle of separation of powers, the principle of legal certainty, the principle of access to justice, the right to legal remedy, the principle of judicial independence, and the prohibition of retroactive effect.” The association called on lawmakers to refrain from enacting norms that infringe upon these principles.

The move by Orban’s government comes as he faces a challenging reelection bid. He has been in power since 2010.