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May 31, 2019 - Zoltán Kovács

Here’s the government’s Economy Protection Action Plan

Following the success of the seven-point, family protection program the government unveiled on Thursday a new Economy Protection Action Plan to maintain Hungary’s GDP growth.

Minister of Finance Mihály Varga revealed on Thursday Hungary’s 13+1-point economy package comprising tax cuts and other measures aimed at maintaining economic growth.

While the Hungarian economy continues at a brisk pace and produces one of the highest growth figures in Europe, it has eased up. Experts predict that the slowing will continue, but Prime Minister Orbán and his government have set out to protect the results our policies have achieved in recent years. Our primary goal is to keep Hungary’s annual GDP growth at two percentage points above the EU average.

In pursuit of these goals, the government has put together an Economy Protection Action Plan. The 13+1 points of the package include:

1. a 2 percent drop in social contribution payroll taxes beginning July 1;

2. a tax cut for small enterprises from 13 to 12 percent effective January 1, 2020;

3. a reduction in tax administration measures;

4. an abolishment of mandatory early tax claims for enterprises from December;

5. a repeal of the advertising tax, beginning in 2022;

6. a reduction of the value-added tax from 18 to 5 percent for accommodation services;

7. a maximum value-added tax of 5 million HUF for construction, expansion and renovation of real estate in small settlements;

8. financial support for businesses that invest in accommodation for the work force;

9. an introduction of development tax allowance for small and medium-sized enterprises;

10. a 10 billion HUF increase in capital for Garantiqa Hitelgarancia Zrt. (catalyzing loans for SMEs);

11. a 5 billion capital increase to boost the agricultural guarantee system;

12. financial support for irrigation system development up to an annual 17 billion HUF from 2020 to 2030;

13. an additional 32 billion HUF for research, development and innovation in 2020;

13+1. the launch of the Hungarian Government Securities Plus Program.

Photo credit: kormany.hu