Two measures of the economic action plan announced in May have come into force on Wednesday, Finance Minister Mihály Varga said, adding that the plan’s aim is to protect the Hungarian economy amid a slowdown in Europe.
The measures to rid businesses of advance tax payments will further streamline their tax administration, while an expansion of tax relief for developments will pave the way for more investments in Hungary, Varga told MTI.
The government wants to ensure that domestic growth remains at least 2 percentage points above the EU average in the coming years, he said.
The abolition of advance tax payments will affect 40,000 businesses, which means they will have fully 170 billion forints (EUR 523m) to play with for an additional five months.
They will pay their taxes in May when their tax returns are prepared, rather than in mid-December, Varga noted.
The second measure to come into force today involves lowering the threshold for tax relief on developments for small enterprises from 500 million forints to 300 million and to 400 million for medium-sized firms.
As we wrote before, the deficit target of 1 percent of GDP contained in next year’s budget can be achieved if fiscal reserves are not entirely depleted, the National Bank of Hungary (NBH) said.