Parliament passes Hungary’s 2022 headline budget

Parliament on Tuesday passed into law the main figures of the government’s 2022 budget, together with amendments by parliament’s budget committee.

The budget passed with 121 votes for and 60 against.

Targeted central revenues total 25,393.8 billion forints as against expenditure of 28,546.5 billion, with a projected shortfall of 3,152.6 billion forints.

According to a justification to the bill, tourism is crucial for reviving the economy after the coronavirus epidemic, therefore the sector will benefit from a total of 81 billion forints next year for developments connected to restarting the economy, up from 40 billion forints this year.

Under the amendments, the Hungarian Academy of Sciences will receive extra funding of 7.3 billion forints to improve “routine academic services for the scientific community”, as well as to reinforce the Academy’s scholarship programmes.

Local government offices will receive an extra 10 billion forints to renew their infrastructure and start new developments.

Youth and family organisations will have access to 2.8 billion forints, 850 million forints more than in 2021, while ethnic minority governments will be granted over 1 billion forints for their operations.

Under the amendment, a finance ministry reserve fund will be raised from 93 billion forints to 105 billion out of which pay hikes for staff at universities operating under a new higher education model will be paid for, among other items.

Parliament also adopted tax cuts aimed at reviving the economy, with 120 votes in favour and 60 against. Under the new tax laws, employers will pay 15 percent social security contributions, 0.5 percent less than in 2021.

Tax paid by individual entrepreneurs will be further simplified with the option of a flat rate if their revenues do not exceed ten times the annual minimum wage or up to fifty times the minimum wage in case of retail traders.

Taxpayers in this system will be exempt from personal income tax up to half of the minimum wage. The measure will benefit 70,000 small firms.

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Source: MTI