Charles I of Hungary - New Economic Policy

New Economic Policy

Charles abolished the domestic private customs systems of the barons and oligarchs, which were created by them in the era of interregnum. The old original customs system was restored at the borders of the kingdom. The customs became a royal prerogative again.

Charles successfully curbed inflation, introducing new coins with a constantly high purity of gold. Florins minted, from 1325, in a newly established mint in Kremnica became soon the popular international means of payment throughout Europe. The reform of the currency and of the whole fiscal system greatly contributed to enrich the treasury.

The gold production of mines reached the figure of 3,000 pounds (1,400 kg) of gold annually. This was one third of the known worlds total production and five times as much as that of any other European state. Through various means between 30 and 40 percent of the revenue derived from gold production found its way into the royal coffers allowing Charles to reform the tax system and still maintain a sumptuous court.

Charles introduced new economic policy and tax systems, which were based on regales or royalties:

• Urbura (=bányabér) was the tax of mines (1/10 of gold and 1/8 of silver) — The landowners – to avoid taxation – kept their mines in secret in 1327 Charles Robert, in order to inspire the landowners open new mines, ordered to gave back the 1/3 of the tax to them.
• Minting money — Only the king was allowed to mint money, who wanted to make an acceptable currency, which wouldn’t devaluate (no income from exchange fee, but it supported external trading)
• Tricesima (Hungarian: harmincadvám) — It was a customs system. The tariff was 1/30 of all foreign commercial affairs.
• Gate tax — Was mainly collected from the peasantry after every gate, where a cart could go through.
• Census (tax of townships and royal landholdings)

also levied tax on the church (1/3 of the papal income)