Economy & Policy

Tax cuts could amount to HUF 1.5 trillion

Minister of Finance Mihály Varga says the government will continue with its fiscal policy of tax cuts and a supportive fiscal policy instead of austerity.

To achieve this, the government must continue restarting the economy and return to families their personal income taxes after achieving 5.5 percent growth.

There will be HUF 84 billion left for families and companies in 2021, the finance minister detailed, and this includes:

  • The reduction of VAT on newly built houses to 5 percent (HUF 110 billion)
  • The exemption of the Family Housing Allowance Program (HUF 25 billion) 
  • The reduction of small business tax to 11 percent (HUF 9 billion)
  • The tax exemption of epidemic-affected sectors (HUF 14 billion)
  • Capping the business tax for SMEs to 1 percent (HUF 84 billion) 
  • The social contribution exemption of Széchenyi Recreation Card or “SZÉP” Card (HUF 41 billion)
  • The reduction of VAT to 5 percent on takeaway food (HUF 7 billion)
  • The tourism development contribution and the reduction of the tourist tax (HUF 41 billion)
  • The reduction of the social contribution (HUF 170 billion),
  • Tax reductions (HUF 89 billion)

In 2022, those under 25 years of age can benefit from a PIT exemption (HUF 140 billion), while families can get their PIT back (HUF 600 billion). Businesses can also benefit from employers’ tax cuts amounting to HUF 130 billion.

The government’s position in dealing with the crisis caused by the epidemic has been consistent and clear from the very beginning, Mihály Varga said. And this has entailed tax cuts and a supportive fiscal policy instead of austerity.

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