Economy Minister: Government not ruling out single-digit personal income tax rate

The government has not given up on its plan to bring the personal income tax rate into the single digits from the current 15 percent rate, the economy minister said in an interview to Friday’s edition of the daily Magyar Idők.

The government would only be able to pass another larger tax cut if all the conditions for it are in place: a stable and growing economy and an improving jobs market, Mihály Varga told the paper. The country must also be on a sound financial footing and make sure that it maintains its “hard-fought” balanced budgetary position, he added.

Varga added that when deciding on tax cuts, it was important to consider the country’s capacity for them. Unlike the Socialist governments of the past, the current Fidesz-led government is not offering “irresponsible handouts” or engaging in “wasteful spending” to attract votes, he said.

“If voters give us the mandate in April, we will continue to safeguard Hungary’s budgetary balance over the next four years

and we will exercise the same kind of discipline when dealing with the country’s finances that we have over the past eight years,” the minister said.

Varga also noted that according to a recent European study, tax burdens in Hungary decreased by more than eight percentage points between 2010 and 2017. Hungary implemented the largest tax cuts out of all European Union member states during this period, he said. In addition, Hungary has the second lowest personal income tax rate in the bloc, he said.

Varga said that while taxes have gone down, wages have risen both in the private and public sectors, thanks to a six-year agreement signed between representatives of the government and businesses in 2016.

Source: MTI