The finance ministry has confirmed that the Hungarian government will continue to compensate local councils for a shortfall in their local business tax revenues, and is engaged in talks on easing the burden on them stemming from the increase in the minimum wage.
During a meeting between state secretary Péter Banai and Károly Szita, head of the Association of Cities with County Rights (MJVSZ), discussions touched on the government’s recently-announced tenders for HUF 140 billion (EUR 383.5m) in funding to improve energy efficiency in smaller settlements aims to protect them from rising energy prices. The ministry noted that the government has cut the local business tax for small businesses to 1 percent. Settlements with populations under 25,000 will be fully compensated for the resulting revenue shortfall, while bigger cities will be compensated depending on their tax capacity, the ministry said. The government is also weighing the possibilities for reducing the burden on local councils stemming from the increase of the minimum wage for unskilled workers to a gross monthly HUF 200,000 and for skilled labourers to HUF 260,000.
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