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.

The State Secretary at the Ministry for National Economy pointed out: last year’s wage agreement is not only about pay rises, but equally includes a major tax reduction plan for a period of six years. Taxes payable on work-related incomes will decrease by 5 percentage points in 2017, and subject to the development of wages, may decrease by further 2 percentage points in each of the coming two years.

Mr Cseresnyés said: the increase of the minimum wage and of the guaranteed wage minimum of qualified workers as set out in the agreement concerns some 1.2 million workers on 1 January 2017, and this measure will increase the savings of families by HUF 220 billion.

In his words, they also expect the wage agreement concluded last year to have a positive impact on the higher pay categories as well: pre-tax wages will increase by 8 to 9 per cent in the competitive sector in 2017, and based on the projected 1.6 per cent inflation, real wages will rise by 7 per cent this year. Added to this are the tax reductions implemented in other areas, such as the reduction of VAT.

The State Secretary at the Ministry for National Economy said that trading companies, businesses in the automotive industry and food industry companies have already indicated plans for higher pay rises in the market sector.

In answer to a question, Mr Dömötör said: they are looking into the possibility of disclosing to the public the report on the investigation related to metro line 4.

Photo: Károly Árvai/kormany.hu

Source: kormany.hu – Press release

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