Daily News Hungary economy

Budapest, January 4 (MTI) – The opposition LMP party has called on the government to treat small and medium-sized enterprises (SME) as strategic partners rather than cosying up to multinationals, the party’s economic policy expert said on Wednesday.

This would involve eliminating tax on the minimum wage and returning the top corporate tax rate to 19 percent, where it stood last year, László Heltai said.

Despite the government’s reduction of wage-related contributions, its hike of the minimum wage will burden companies more than the drop in contributions, he said. The cabinet has placed and extra burden of 300 billion forints (EUR 970m) on SMEs while at the same time firms are suffering from a shortage of skilled labour and market opportunities, he added.

Heltai slammed the ruling Fidesz party’s ‘flawed economic policies”, citing figures showing that among OECD countries, Hungary has the highest burdens on the lowest wages.

He said Fidesz still considered multinationals the backbone of Hungarian economy despite communicating the opposite. The government’s decisions generally profit those that are close to Fidesz, the LMP politician added.

In response, Fidesz said in a statement that “if it were for the opposition there would be no tax cuts or wage rises”, and argued that LMP, similarly to other opposition parties, had failed to support the government’s efforts to cut employer taxes. Hungary has the lowest corporate tax in the EU, the tax benefit for small businesses has been doubled and employer taxes on salaries have been cut, leaving a total 580 billion forints (EUR 1.9bn) with companies, authors of the statement insisted.

Source: MTI

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