The minister added that Hungary’s tax policy is geared to boosting labor, and this is why the VAT rate is higher than elsewhere in the European Union. At the same time, Hungary has the lowest corporation tax and the third lowest personal income tax in Europe, he added. “I agree with the central bank that higher inflation is dangerous,” he said, adding that the budget deficit, too, would end up higher, like in much of the rest of Europe, though Hungary would return to 3 percent deficit level in 2024.
Finance Minister: Hungary's current high level of inflation is temporary
The central bank has already made a move to reduce inflation, having been the first European central bank to hike the base rate.