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Apr 28, 2017

The goal of Hungary's 2018 budget is for "everyone to be better off"

Prime Minister Viktor Orbán has said that ''the new budget will be the working people's budget" which will include tax cuts and an increased minimum wage.

Prime Minister Viktor Orbán has said that ''the new budget will be the working people's budget" which will include tax cuts and an increased minimum wage.

Meanwhile, János Lázár, the minister heading the Prime Minister’s Office, said that the goal for the new budget is for everyone to be better off, and to enhance the security of those living off work. He said that the observance of the wage agreements, the reduction of the taxes encumbering employment, family support and the reinforcement of law enforcement are important priorities.

The Hungarian government will submit its proposal regarding the 2018 budget to Parliament on May 2nd, and the House will approve it by June 15th, Lázár said. The budget will be characterized by a high degree of predictability and stability, and developments will be carried out against the background of the ongoing reduction of the sovereign debt, he added.

He said that the deficit is planned to be around 2.4 percent, the GDP may grow by 4.3 percent, consumption may increase by somewhere between 4.5 and 5 percent, and the target rate for inflation will be 3 percent which will coincide with the rate of pension increases.

He added that the minimum wage will be 138,000 HUF in 2018, while the guaranteed wage minimum will amount to 180,000 HUF. This means that net average earnings will increase by 8.8 percent. The country is on the verge of a major rise in incomes, Lázár said in evaluation.

He also said that tax reductions will continue. The tax on small businesses and the rate of the healthcare contribution will decrease significantly. VAT on Internet services will decrease from 18 percent to 5 percent, while the VAT on fish will also be reduced to 5 percent.