PM Orbán remains committed to single digit personal income tax

Hungary’s flat-rate personal income tax can hopefully be reduced from the current level of 16 percent to single digits within three years, Prime Minister Viktor Orbán said at a business forum organised by the Japan Business Federation (Keidanred) and the Hungarian Investment and Trade Agency (HITA) in Japan on Friday.

He told about 150 businessmen attending the forum in Tokyo, including 61 Hungarians, that he would support a “zero percent” personal income tax rate if possible, but hopes Hungary will succeed in reducing the tax rate to below ten percent.

In his speech, delivered in English, Prime Minister Orbán emphasised that Hungary and Central Europe support the signing of a free trade agreement between Japan and the European Union at the earliest opportunity. He said that there were many similarities between the Japanese and the Hungarian governments’ approach to the crisis and how to handle it.

Keidanred chairman Yonekura Hiromasa said it had been high time for the Hungarian Prime Minister to visit Japan. Hungary’s economy, which is progressing faster than the European Union average, has already overcome the crisis and this has a beneficial effect on Japanese-Hungarian relations, he added. The chairman recalled that a great number of Japanese companies are operating in Hungary and cooperation between the two countries continues to expand.

Hungary is Japan’s most important import partner in Central and Eastern Europe and is the second most important trading partner in exports after Poland. The volume of Japanese foreign direct investment in 2012 was EUR 722 million, according to the National Bank of Hungary (MNB), ranking Japan 11th-12th among Hungary’s largest foreign investors.

When it comes to goods turnover, according to Central Statistical Office (KSH) figures Japan was Hungary’s most important partner from Asia in 2012. Exports of machinery and transport equipment accounted for the greatest part (43 percent) in outgoing trade towards the island nation, while exports of processed products represented 37 percent.

Imports from Japan are largely dominated by trade in machinery and transport equipment, while processed products make up 25 percent of total imports. According to a survey prepared this year by the Japan External Trade Organisation, some 150 Japanese-owned companies are currently operating in Hungary.

After his lecture at the business forum, the Prime Minister attended an audience in the Imperial Palace where he met Emperor Akihito and Empress Michiko. He later held talks with Shigehisa Takada, chairman and CEO of Takata Corporation, and Suzuki Osamu, head of Suzuki Motor Corporation. At the end of his Japanese visit, Viktor Orbán will visit Kyoto and is scheduled to return to Budapest on Saturday evening.

Prime Minister’s Office

Photo: Barna Burger