Government: The left would punch a HUF 800 billion-hole in Hungary’s budget
The opposition Socialists’ three amendment proposals submitted to the government’s amendment to the tax laws would “punch a hole of HUF 800 billion (EUR 1.97 billion) in the central budget”, deputy finance minister András Tállai told MTI on Sunday.
The proposals, if passed into law, could compromise the government’s programme of capping household utilities, maintaining the family support system and preserving the real value of pensions, Tállai said.
According to Tállai, the leftist parties would “hand out funds irresponsibly, missing the target, and it would destroy a well-functioning tax system which contains incentives for employment”.
Concerning the actual proposals, Tállai said one of them was aimed at scrapping tax refunds, which ran contrary to the government’s aim of “levying the lowest possible taxes on revenues gained through work”.
Referring to the proposal aimed at reducing the VAT on gas and electricity, Tállai said “VAT cuts are an extremely expensive and less effective tool of redistribution”, while the government seeks to protect families through the utility cap scheme and businesses through direct subsidies against “sanctions-generated energy price hikes”.
“We will protect the tax cuts and the family subsidies despite the current crisis caused by sanctions,” he said.
Referring to Eurostat figures, Tállai said Hungary had implemented the greatest tax cuts in the European Union last year. While in most countries the taxes went up, Hungary had reduced the tax burden to 34 percent of GDP, as against the EU average of nearly 42 percent, he said.
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Source: MTI
Now for the facts – relative to the OECD average, the tax structure in Hungary is characterized by:
Higher revenues from social security contributions; payroll taxes; value-added taxes; and goods & services taxes
(excluding VAT/GST).
A lower proportion of revenues from taxes on personal income, profits & gains; taxes on corporate income & gains; and
property taxes.
https://www.oecd.org/tax/revenue-statistics-hungary.pdf
Our Politicians are holding off on the 15% Global Minimum Tax for large multinationals (which WILL be introduced) whilst clinging on to the EU’s highest 27% VAT rate.