The social constribution tax and health contribution payment are to be reduced to 19.5 percent each in line with a proposal submitted to parliament by Economy Minister Mihály Varga.

The justification of the proposal published on parliament’s website on Tuesday shows that an increase in the minimum wage and real wages and a decrease in employers’ wage burdens were agreed at the permanent consultation forum of the business sector and the government on November 24, 2016.

In line with this agreement and as a result of the favourable development of macro economic conditions, the proposal includes reducing the social contribution tax to 19.5 percent instead of the formerly planned 20 percent effective January 2018. At the same time,

the health contribution payment is proposed to drop to 19.5 percent from 22 percent.

As we wrote before, citing a European Commission study, Hungary’s economy minister has said that tax evasion has dropped significantly in the country. The government’s measures to whiten the economy have been effective, and tax evasion in Hungary is now half the rate of other countries in the region, Varga told.

Also we wrote on Spetember, Hungary’s government plans to cut the payroll tax by 2.5 percentage points next year rather than by 2 percent in reaction to fast wage growth, Economy Minister Varga said.

Source: MTI

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