Hungary is wise to reject the global minimum tax proposal that would significantly damage the valuable tax competition among countries and would cause undue harm to businesses, workers, and economies around the world, Grover Norquist, President of Americans for Tax Reform, said on the conservative advocacy group’s website.
Norquist said a global minimum tax would greatly curtail the force of tax competition. He added that competition between nations offered a critical check on the power of governments and it was vital for ensuring efficient and reasonable levels of taxation.
“The proposed minimum tax rate would be particularly detrimental to countries such as Ireland, Bulgaria, and Hungary that currently keep their corporate tax rates at lower, more competitive rates,”
“A global minimum tax also threatens poorer, developing countries that need to maintain high growth rates in order to be lifted out of poverty. Cutting corporate tax rates leads to an increase in investment, productivity, economic growth, output, and ultimately higher standards of living,” he added. Norquist said the global tax agreement was very dangerous, as it increased the tax burden on US and European manufacturers at a time of war and significant challenges to western economies.
Hungary does not support the introduction of a global minimum tax, Foreign Minister Péter Szijjártó said on Thursday, arguing that it would be harmful and would threaten jobs.
International pressure to introduce a global minimum tax in Europe as early as the beginning of next year is continuously growing,
Szijjártó said in a post on Facebook. “We consider this extremely dangerous,” he said, arguing that there was a war in Europe and the European economy was facing serious challenges like high energy prices, interest rates and inflation, as well as supply chain disruptions.
In such a situation, increasing the tax burdens of European companies would cause serious problems, especially given that the global minimum tax would only be introduced in Europe, the minister said. The minimum tax
would put European businesses at a serious competitive disadvantage against their global rivals,
“But, of course, central Europe would be hit hardest out of everyone,” Szijjártó said. Thanks to disciplined fiscal policies, central Europe has the lowest corporate and payroll taxes, which would see a drastic increase if the global minimum tax were to be introduced, he said.
The key to Hungary’s economic success is that it has continually cut taxes in recent years, Szijjártó said, arguing that tax increases would hurt the economy and threaten jobs. “We cannot support such a proposal,” Szijjártó said. He said this will be the position Finance Minister Mihály Varga will represent at Friday’s Ecofin meeting.