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Feb 23, 2018

Hungarian government still plans on dropping income tax from 15 percent to single digits

Mihály Varga said the government would only be able to pass another larger tax cut if all the conditions for it are in place, which include a stable and growing economy and an improving jobs market

Hungary’s economy minister has said the government still plans on dropping income tax from 15 percent to single digits.

During an interview with Magyar Idők, Mihály Varga said the government would only be able to pass another larger tax cut if all the conditions for it are in place, which include a stable and growing economy and an improving jobs market.

The minister said the country must also be on a sound financial footing and make sure that it maintains its “hard-fought” balanced budgetary position, he added.

Minister Varga added that when deciding on tax cuts, it was important to consider the country’s capacity for them. Unlike the Socialist governments of the past, the current Fidesz-led government is not offering “irresponsible handouts” or engaging in “wasteful spending” to attract votes, he said.

“If voters give us the mandate in April, we will continue to safeguard Hungary’s budgetary balance over the next four years and we will exercise the same kind of discipline when dealing with the country’s finances that we have over the past eight years,” he said.

The minister also noted that according to a recent European study, tax burdens in Hungary decreased by more than eight percentage points between 2010 and 2017. Hungary implemented the largest tax cuts out of all European Union member states during this period, he said.

The minister also pointed out that Hungary has the second lowest personal income tax rate in the bloc. The minister said that while taxes have gone down, wages have risen both in the private and public sectors, thanks to a six-year agreement signed between representatives of the government and businesses in 2016.