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Economy & Policy

HUF 750 billion in tax cuts in 2022

The Cabinet of Ministers for Economic Affairs has decided on HUF 750 billion worth of tax cuts, with taxes on labor further reduced.

As MTI reported, Finance Minister Mihály Varga announced on Sunday that the social contribution tax rate will be reduced by 2.5 percentage points, the 1.5 percent vocational training contribution will be abolished, and the small business tax rate will be reduced to 10 percent from the 1st of January 2022. He also announced that the local business tax exemption for small and medium-sized enterprises will be extended, so they will pay a maximum tax of 1 percent in 2022, Mihály Varga said.

The total amount of tax cuts this year and next year will reach HUF 2 trillion, the minister stressed.

Speaking at the 29th Fidesz Renewal Congress in Budapest, the minister said that two years ago, the Hungarian economy was the second fastest growing economy in Europe, and today, even after a global crisis, Hungary is one of the fastest to restart its economy. The recovery would not have been so rapid if the pandemic had not hit a strong, fast-growing, resilient Hungary, he added.

The global economic downturn in 2020 was 3.6 percent, compared with 1.7 percent in 2009, meaning the crisis was twice as hard as the one the Gyurcsány-Bajnai government had to deal with in 2008, he said.

The Hungarian economy is already outperforming its pre-pandemic level and, with a one-year delay due to the pandemic, the government has also delivered on its promise to create 1 million jobs, with 4.7 million people now working in Hungary, he said.

He noted that in the middle of a Europe-wide energy crisis, the left would return to market prices, while Brussels’ misguided climate policy would place yet another burden on families. The Hungarian government, however, has fixed the prices in time, so Hungarian households are paying the lowest energy prices in Europe today, he said.

The minister said that Hungary is emerging from the crisis with a head start, and people can expect sustained high growth rates in the coming years. The government will continue the work that made the previous decade the most successful period in the history of the Hungarian economy, he said.

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