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Government mulls lowering payroll taxes, says economy minister

Government mulls lowering payroll taxes, says economy minister

Budapest (MTI) – The government and its economic partners agree that payroll taxes should be the next area of tax cuts and the government’s autumn tax legislation package will include proposals affecting employment and the labour market, Economy Minister Mihály Varga said after a meeting of the economic cabinet on Tuesday.

Varga added that these proposals will create the opportunity from January 1 for jobseekers to find employment far more quickly at businesses struggling with labour shortage. He said the government wants to consult its partners on what form of payroll tax cuts they would consider necessary. When lowering payroll taxes, the government must ensure that the pension and health insurance funds continue to guarantee health care provision and pension payments, Varga added.

The minister said the government is standing by its target for full-year GDP growth of 2.5 percent. He said economic indicators for the first two quarters showed that Hungary’s economic growth has sustained its momentum. Hungary registered the second-highest GDP growth rate in the EU in Q2 this year, he said.

Regarding the state budget, he said the economic cabinet had determined that this year’s budget deficit could be even below 2 percent of GDP. Varga said the government expects public debt to sink below 75 percent of GDP.

Photo: MTI

Source: MTI

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