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Dec 24, 2016

Hungary to cut personal income tax rate to just 9 percent

The personal income rate cut will be made if economic growth climbs above 3 percent on a sustained basis

Hungary could cut its personal income tax rate to 9 percent from the present 15 percent in 2018, it has been reported today.

According to Reuters, the rate cut will be made if economic growth climbs above 3 percent on a sustained basis, Mihály Varga, minister for National Economy, told business daily Vilaggazdasag.

Earlier this week, Hungary raised its economic growth forecast to over 4 percent in the next two years after unveiling a batch of stimulus measures.

The sharp improvement in growth outlook follows an agreement with private sector employers on big hikes in the minimum wage for the next two years in return for cuts in payroll taxes and a reduction in the corporate tax to a flat 9 percent.

Minister Varga said that the government, which has stabilized the budget with so-called unorthodox measures such as a bank levy and a string of sectoral taxes on companies, could also consider other benefits which would stimulate the economy.