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Sep 14, 2016

Hungarian government: Next tax cuts will include lowering social contributions

There will be several proposals related to the labor market and employment in the autumn tax bill, Mihály Varga, minister for National Economy has said

The Hungarian government has said that the next phase of reducing public burdens should include the lowering of social contributions.

There will be several proposals related to the labor market and employment in the autumn tax bill, Mihály Varga, minister for National Economy has said.

The minister added that these proposals may help – already from January 1, 2017 -- the hiring of jobseekers by enterprises with labor shortages.

The government is to hold talks with partners on which form of contribution reduction they believe to be necessary. Social contributions may only be modified, however, in a way that guarantees sufficient coverage for healthcare and pension expenditures, he pointed out.

The government’s economic growth target of 2.5 percent of GDP is attainable, he stressed, as data from the initial two quarters of this year show economic growth momentum has remained strong.

Discussions also focused around options for cutting red tape for CSOK (Home Purchase Subsidy scheme for families), and there is “a good chance” that proposals will be endorsed by the government and after that further forms of allowances and subsidies may speed up the utilization of incentives.

Some taxation incentives are also being considered, he said, and they can be included in the autumn tax package.