Hungary’s government to insist on tax reductions

The Government will insist on tax reductions “tooth and nail”, the Minister of State at the Cabinet Office of the Prime Minister stated at a press conference.

After the pay rises in the public sector, the tax reductions will also create the conditions for higher salaries in the private sector; the comprehensive wage agreement already has its effects felt, Csaba Dömötör said.

He pointed out: the Hungarian GDP is increasing steadily, unemployment has decreased from some 12 per cent in 2010 to 4.5 per cent to date, during the same period, the number of people in employment has increased by more than 700 thousand, and the majority of new jobs have been created in the market sector.

He added: it is these economic achievements that made possible the conclusion of a comprehensive agreement on tax reductions and wage increases between employers, workers and the Government at the end of 2016.

Péter Cseresnyés, State Secretary for the Labour Market and Training at the Ministry for National Economy said that real wages have increased by more than 20 per cent since 2013, while in the first ten months of 2016, the dynamism of pay rises accelerated: real wages increased by 7.4 per cent during this period.

Mr Dömötör stressed that the taxes payable by employers have been reduced, the corporation tax now stands at 9 per cent for all businesses, and by virtue of the fixed single-rate income tax and the available family tax benefits, there is more money left with those living off wages and salaries.

He said: they cannot rely on the opposition in the struggle to cut taxes, and reiterated that the opposition parties did not support the reduction of taxes at the parliamentary vote.

In contrast to the opposition’s policy, the Government would not only like to achieve that everyone should have jobs, but would also like to make being in employment worthwhile, Mr Dömötör said.