Tax cuts announced by the Hungarian Finance Minister

The government is preparing for the post-war situation by working to keep the economy on a trajectory to catch up with more developed economies, the employment rate at the current level and to draw further investments, Finance Minister Mihály Varga said on Monday.

Varga told a crisis management conference of the Budapest Chamber of Commerce and Industry that the measures taken to maintain stability and balance last year should be continued.

The government will, at the same time, propose amendments to tax regulations to ease the administrative burden on flat-rate taxpayers and tweak corporate taxes, he said. Under the proposal, flat-rate tax returns will be due quarterly rather than monthly, and the companies will be able to choose progressive tax payments up to a revenue of 25 million forints, he said.

Further, the government has launched a programme to improve SMEs’ energy efficiency, along with a scheme to help large corporations maintain manufacturing plants in the country.

Meanwhile, it is important to support the production of alternative energy to curb the country’s dependence on energy imports, he said.

Regarding the central bank’s recent interest rate hikes, Varga said those steps served stability. Loan interests are expected to rise to as high as 10-15 percent this year, while inflation is expected to hit 14 percent, he said.

In addition, Hungary has been hit by severe droughts that curbed agricultural and food industry performance by 40 percent, he said.

The government is working to curb the fallout of those “blows” on the Hungarian economy, he said.

“I am sure we will be able to reach an agreement with the European Commission on the resources Hungary is entitled to,” he said. Hungary is fulfilling the EC’s requirements, and its steps may be approved in December, he said.


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