Great tax reduction to come in the next few years in Hungary!

Maybe not next year, but either in 2020 or 2021, there will be a significant margin in the budget of Hungary. The government only has to decide how to make use of it.

The Hungarian Ministry of Finance published their annual mid-term macroeconomic and budget prognosis for the period of 2018-2022, reports Portfolio.hu. They claim the government expects 1.9-2.1% deficit instead of the previous 2.4%. Other interesting data can be found in the figures at the end of the document.

The most important of these is what the government thinks about how the expenditures of the tax reduction and development fund will turn out in the mid-term. From this, we can draw the margin the government expects for the particular year. According to the prognosis,

the government expects a margin of HUF 60 billion (EUR 181.57 million) in 2019, HUF 60 billion (EUR 181.57 million) in 2020, HUF 460 billion (EUR 1.39 billion) in 2021 and even HUF 510 billion (EUR 1.54 billion) in 2022.

Source of Infographic: Hungarian Ministry of Finance/Portfolio.hu

Comparing the current mid-term prognosis with the earlier ones, we can see that the amount of funds is gradually decreasing year by year, which means the government makes use of their margin (partly) for tax reduction and/or to raise expenditures. It is interesting that

the current document expects the highest margin for 2022, the year of Hungarian elections.

This can be realised if the government deficit remains on a downward path, meaning the ESA deficit will be only 0.5% by the end of this governmental period (2022).

Source: portfolio.hu