Economy Minister Varga: Hungary GDP growth could reach 2.8-2.9pc this year
Budapest (MTI) – Hungary’s government estimates GDP growth could reach 2.8-2.9 percent this year, Economy Minister Mihaly Varga said at a conference organised by business association MGYOSZ on Wednesday.
The government’s official projection for GDP growth this year is 2.5 percent at present.
Varga said it is not only the government but also analysts and institutions, including those critical of the government, saying that it is not unrealistic to expect around 3 percent GDP growth and the risks seen for 2015-2016 tend to be positive rather than negative for Hungary.
The 2014-2020 European Union development cycle will be a “good tool to maintain the impetus of economic growth”, the minister said. He reiterated that whereas only 16 percent of EU resources had been spent on economic development in 2007-2013, this ratio would be around 60 percent in the current period.
Varga added that boosting lending is crucial for maintaining growth and the significant cut in the bank levy announced by Prime Minister Viktor Orban in February could contribute to this.
Varga said the tax office needs to develop a new approach adjusted to the client-friendly tax system which helps economic growth instead of hindering it. He added that the new law on the rules of taxation will be introduced on January 1 next year.
If a tax audit cannot be finished in six months, it reflects problems with the tax office, too. It follows that the system needs to be streamlined, the minister said.
“We expect a behaviour from the National Tax and Customs Authority (NAV) that does not slow but promote economic growth, and supports economic players,” he said.
In its current tax philosophy, all taxpayers are bad. The system is overly strict, without giving the tax office any possibility for assessing cases individually. However, it is necessary to differentiate between good taxpayers and bad ones and the office should “approach taxpayers with sensible understanding,” he said.
The government wants to lift the responsibility from Hungarians of preparing their own personal income tax returns by 2017, Varga said.