Budapest, December 5 (MTI) – Economy Minister Mihály Varga submitted a bill to parliament on Monday that would establish a 9 percent flat-rate corporate tax from January 1, 2017.
The corporate tax rate is currently 10 percent on a tax base up to 500 million forints and 19 percent above that.
Prime Minister Viktor Orbán announced the government’s plans to introduce the lower, flat-rate corporate tax about two weeks earlier.
The bill would reduce the payroll tax from 27 percent to 22 percent from next year and to 20 percent from 2018.
The planned payroll tax cut was announced in November, after the government reached an agreement with employers and unions on a big minimum wage increase.
The bill would also allow local governments to extend a building tax to surfaces used for advertising. Municipal councils could decide on the scale of the annual tax which the bill would cap at 12,000 forints per square metre.
Janos Halasz, spokesman of the ruling Fidesz party’s parliamentary group, told a news conference that Fidesz had always been the party of tax cuts. Commenting on the bill to reduce various taxes, he said that as taxes were falling, the economy was strengthening, employment was growing and wages rising.
“This is precisely the opposite of what happened under the left-wing government, when unemployment doubled, tax burdens on employers and employees increased and wages were outpaced by inflation,” he said.