Hungary’s PM reiterates plans to lower personal income tax to single digit, govt to keep sectoral taxes

By bne IntelliNews June 16, 2014

Hungary's Prime Minister Viktor Orban has reiterated his plans to lower the personal income tax rate from 16% at present to below 10% by the end of his government's term in 2018, reported, citing Orban as saying in an interview for public radio MR1. This goal could be achieved if the country’s economic growth reaches 4-6%.

We note that the current Hungarian government applied a flat 16% personal income tax rate, when it first came to power in 2010, halving the highest 32% progressive rate.  

Lowering the personal income tax rate to 9% would cut budget revenues by 44%, or by HUF 522bn (EUR 1.75bn) annually based on 2011 data, reported last November, citing an analysis published in the Public Finance Quarterly.

Meanwhile, Orban noted that the government remains committed to special taxes, imposed on financial, energy, retail and telecommunications sectors. The PM also motivated the introduction of a special tax on the advertisement sector with the principal of fair sharing of public burdens.

Related Articles

Hungarian opposition parties seek explanation for secret admission of asylum seekers

Despite its all-out attacks on the EU’s refugee quotas, Viktor Orban's government secretly gave permission for the admission of the same number of asylum seekers to the country in 2017 as ... more

Hungarian president sets date for parliamentary election

President Janos Ader has set April 8 as the date of Hungary's general election, it was announced on January 11. This is the earliest possible Sunday that the ballot can be held under the law. The ... more

Hungarian government backtracks from collecting fines from opposition parties before election

The Economy Ministry on January 10 asked the tax authority to delay collecting fines from opposition parties imposed by the state auditor ASZ to ensure that their pre-election budgets and campaign ... more