Parlt Raises 2016 Budget Revenue, Spending Targets By HUF 422Bn

  • 14 Jun 2016 9:00 AM
Parlt Raises 2016 Budget Revenue, Spending Targets By HUF 422Bn
Lawmakers approved amendments to the 2016 budget act raising both revenue and expenditures by 421.7 billion forints (EUR 1.4bn). The amendments were passed with 121 votes in favour and 63 against. The MPs raised the revenue target from 15,800.4 billion forints to 16,222.1 billion forints. They increased the expenditure target from 16,562.0 billion forints to 16,983.7 billion forints.

The cash-flow-based deficit target is unchanged at 761.6 billion forints. The higher expenditures will be covered by “the transfer of the base effect of higher tax revenue from processes in 2015” as well as “favourable trends in 2016”, according to the justification attached to the amendments, submitted by Economy Minister Mihály Varga.

The justification attributed the higher revenue from taxes and contributions to economic growth, higher wage payouts and improved taxpayer morale resulting from a government crackdown on the shadow economy. The amendments raise targeted revenue from corporate tax by 289.4 billion forints to 689.9 billion forints.

The target for revenue from VAT was raised by 37.0 billion forints to 3,388.9 billion forints and the target for revenue from excise tax by 32.3 billion forints to 984.5 billion forints.

The target for revenue from personal income tax increased by about 36 billion forints to 1,694.5 billion forints. The justification of the amendments said “one of the most important reasons” for the fiscal amendments is clearing up budget problems at Klik, an institute established to oversee education in Hungary.

With the amendments, the government aims to ensure that the system of maintaining state schools can fulfil tasks without interruption and without debt, according to the justification. The amendments raise support for the state school manager by about 91.5 billion forints to 640.8 billion forints. They also allocate 50 billion forints in additional spending for the “Modern Cities” development programme.

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

MTI photo: Koszticsák Szilárd

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