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Hungarian government to significantly reduce personal income tax

Given the current state of public finances, it seems realistic that the government could significantly reduce personal income tax from 2021.

SAO President László Domokos has said it seems realistic that the government could significantly reduce personal income tax from 2021.

Domokos added that the state should continue to support the creation of jobs, but also launch labor market programs that improve efficiency and help innovation, in order to boost the country’s competitiveness. “In addition to tax cuts, job creation has also played a key role in economic growth in recent years,” he said.

According to new data, between August and October this year, 4.52 million employees were registered by the Central Statistical Office. This number was 18,000 higher than last year, and the employment rate jumped by over 70 percent. 

From the official registered figures, it can be said that a work-based society has evolved in Hungary. Therefore, state support for job creation and employment should focus on quality instead of quantity. Explaining this, Domokos said that in recent years, the most important thing has been to get more people into employment, and so in many cases the state has also supported unique investments from public money. 

“Economic growth can now be primarily driven by job creation programs that reward innovation and development and improve the efficiency of businesses, as these are the factors that make Hungary more competitive,” he said.

Reducing taxes on labor is one of the country’s long-term investments, as the reduction of public burdens is an excellent tool for the state to encourage individuals, economic operators and companies to plan and invest. Therefore, the SAO president agrees with tax reductions and believes it is realistic for the government to begin a significant reduction from 2021 onward.

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