Changes to Act CIII of 2011 on the Public Health Product Tax in years 2022 and 2023 and their impact on the Hungarian food industry, particularly the bakery industry

Abstract

Public health is a social activity aimed at improving the state of health of a population, which includes activities aimed at both maintaining health and preventing diseases. In particular, rules on food as a recognised health determinant are an important area. In the field of public health, the regulatory system is mostly preventive and influences the attitudes of the population, while food composition requirements fall within the area of food safety, although the latter also ultimately aims to preserve health and prevent diseases. In 2011, through Act CIII of 2011), the Hungarian legislature introduced the Public Health Product Tax (hereinafter: Neta Act), including an international level in a pioneering manner, "in order to reduce the consumption of foods that are not useful for public health, to promote healthy nutrition, and to improve the financing of health services, especially programmes aimed at public health". (Neta Act, 2011)
My objective is twofold: on the one hand, I examine what amendments have been made since the Neta Act entered into force in September 2011, and on the other hand, I seek to answer the question of what challenges the domestic food industry, especially the bakery sector, have faced during its application. With my article I undertake a secondary analysis of the domestic and international literature at my disposal, together with the teleological interpretation of the Neta law; at the same time, showing why the application of the Neta Act is problematic for Hungarian bakery manufacturers, in several aspects. In the following, I will divide the analysis into eight major units. The first chapter is about the fundamentals of economics: here I clarify some economic concepts and theories that are essential for the discussion of the Neta Act, I enumerate the possible reasons that may make the introduction of Neta sound from an economic point of view, and then I seek an answer to the question of how the effectiveness of Neta-type taxes can be examined. In the second chapter, a brief international outlook will take place. At the beginning of the 2010s, several countries decided to tax one or more types of food considered unhealthy, but none of the countries' solutions were as complex as the Hungarian Neta Act. In the third chapter I place Neta in the Hungarian tax system, I briefly summarize what type of tax it is. In the fourth chapter, I examine the text of the Neta Act at the time of its promulgation and its changes between September 29, 2011 and 2019. In the fifth chapter, I try to outline the impact of the introduction of Neta on the public health situation in Hungary and how it affected the actors of the food industry, namely companies producing products subject to Neta payment. In the sixth chapter, I review the amendments to the Neta Act introduced in 2022 and 2023. In the seventh chapter of my thesis – which also presents new research results – I seek to answer the question of what challenges the Neta Act, including its amendments introduced in 2022 and 2023 that related to the state of emergency declared due to the Covid-19 pandemic, posed to manufacturers belonging to the Neta obligation, especially bakery companies. In the eighth chapter of the article, I planned to give an overview of the judicial practice concerning the Neta Act, but during the collection of material I was faced with the fact that we can hardly talk about substantive court practice: searching for the Neta Act in the repository of anonymised decisions gives us a total of two results, so in the closing chapter I summarize the essential findings of these two Curia decisions. For my research, I closed the collection of material on August 5th 2023, examining the texts of legislation in force (or in force before that date).