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Apr 26, 2017

Hungary reveals 2018 budget plans

Hungary's 2018 budget would contain a two percentage point cut in the payroll tax, a one percentage point reduction in the tax on small businesses, a decrease in the VAT rate on internet service and fish, expanded tax preferences for families with children, higher public sector wages and 400 billion for roads and developments in big cities

Hungary has implemented several new measures to stimulate the economy, according to recent statements from the Ministry for National Economy.

Higher economic growth, disciplined fiscal policy and a crackdown on tax evasion will balance out tax cuts and pay rises for public sector workers in the 2018 budget, Mihály Varga, minister for National Economy, has said.

“I can note surplus revenue from economic development as well as the material advantage resulting from disciplined fiscal policy, but the crackdown on the shadow economy is also important,” Minister Varga told daily Magyar Idők, commenting on the budget revenue necessary to cover planned tax cuts and public sector pay rises next year.

“Mandating the connection of tills to the tax office and the electronic oversight system for road haulage companies has generated an annual 200-300 billion HUF (640-960 million EUR) so far. Next year, a new element will be added to the war chest: from July 1, 2018 an online invoicing system could be introduced requiring that companies send their most important business data to the tax office. With this measure, the tax office will be able to see practically the entire turnover of all economic players.”

According to MTI, Varga noted that the 2018 budget would contain a two percentage point cut in the payroll tax, a one percentage point reduction in the tax on small businesses, a decrease in the VAT rate on internet service and fish, expanded tax preferences for families with children, higher public sector wages and 400 billion for roads and developments in big cities.

The public sector wage rises will cost about 200 billion, the expanded tax preferences for families with two children some 20 billion and the lower tax for small businesses around 10 billion HUF, he added.