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OECD: Hungary remains at the forefront of tax cuts

Minister of Finance Mihály Varga announced that according to the OECD, Hungary has had the second largest reduction in taxes.

According to the OECD Tax Policy Reforms 2020 study, the tax burden as a share of GDP decreased the most in Hungary, 1.6 percent, between 2017 and 2018, coming in just after the United States. 

The Hungarian Government has opted for a policy of tax cuts, even in the context of economic protection measures needed due to the coronavirus epidemic. Taxes on labor, businesses and families have been steadily declining since 2010. And as taxes have fallen, employment has luded in the studyrisen, the economy has grown and wages have increased, Minister of Finance Mihály Varga emphasized.

The Hungarian result is also exemplary because taxes have decreased not only in the short term, but also over a 10-year period, the minister pointed out. 

While tax increases were measured in 70 percent of OECD countries, the tax burden as a proportion of GDP in Hungary decreased from 39.5 percent to 36.6 percent in 2018, ranking Hungary just after Ireland. According to the report, 28 of 39 countries — such as Greece, France, Portugal and Slovakia — had higher taxes in 2018 than in 2008.

The OECD highlighted, among other things, the reductions in social contribution taxes as well as corporate taxes in Hungary. The rate of the latter at 9 percent is the lowest in the European Union, Varga noted.

He stressed that the government continued its policy of tax cuts this year. From January 1, it granted mothers with four children a lifetime exemption from the personal income tax and also exempted all working pensioners from paying contributions. The rate of the small business tax decreased from 13 to 12 percent, and the sales tax burden of accommodation providers decreased by 9 percent. From July 1, the social contribution tax was reduced by another two percentage points as well.

The Minister of Finance additionally pointed out the tax breaks introduced due to the harmful effects of the coronavirus epidemic have so far left more than HUF 100 billion for families and entrepreneurs.

Source
www.magyarnemzet.hu
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