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Economy Minister: Businesses To Keep HUF 40 Billion Next Year

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Economy Minister: Businesses To Keep HUF 40 Billion Next Year
Public burdens on businesses will be reduced by 2.5 percentage points next year if parliament approves a proposal submitted by Economy Minister Mihály Varga.

The minister told MTI that a six-year agreement signed between representatives of the government and businesses last year has fulfilled expectations, and he has proposed reducing taxes on employers by 2.5 percentage points instead of the formerly planned 2 percentage points.

The government signed the agreement with representatives of employers and employees last November in order to end the era of low wages in Hungary.

The agreement included reducing social contribution tax to 20%, effective January 1, 2018.
However, since the average gross wage increase in the business sector is projected to reach 11% in the first nine months of this year, an additional 0.5 percentage point reduction in the social contribution tax is possible from 2018, Varga added.

This 0.5 percentage point will mean more than 40 billion forints (EUR 130 million) will remain with employers, he said. In addition, the health contribution payment is slated to drop from the current 22% to 19.5%.

Varga also said that Hungary is at the forefront in the European Union of fighting the black economy and personal income tax is the second lowest in Europe. In six years’ time, employers’ taxes are planned to drop by more than half, to 15.5%, he added.

Republished with permission of Hungary Matters, MTI’s daily newsletter.

MTI photo: Vajda János