Economy
Dept. State Secretary: No need to raise corporate tax in Hungary
Upcoming changes to the tax regime will promote stability and growth, the Deputy State Secretary sain on public radio on Tuesday, acknowledging that Hungary's taxation system was subject to dynamic and major changes under the Orbán administration in past 4 years. "This should be replaced with a stable and predictable tax environment, with fewer and slower-paced tax changes, in order to enable market actors to plan ahead," he added.
Pankucsi highlighted the importance of predictability, as something that facilitates decision making, as opposed to a constantly changing tax environment. "Guarantees of stability include a sound budget and sustainable deficit. Tax policy is among the tools required to achieve these, therefore, unnecessary tax cuts will definitely not be approved; on the other hand there is no need to hike corporate tax either," the tax official explained.
The current structure of Hungary's tax regime, in which the bulk of tax revenue comes from consumption and sales taxes, is not going to change, Pankucsi said.
"Whether the specific VAT rates will be subject to change is a budgeting question. In any case, no tax cuts or hikes are being planned right now. We continue to strive for progressively lower taxes on labour," he continued.
"The first step in this process was adopting a flat-rate personal income rate of 16%, which, assuming there is sufficient room for fiscal manoeuvre, could be further reduced. It seems a realistic mid-term goal to aim for a single-digit tax rate," the Deputy State Secretary explained.
According to Pankucsi, the government's objective is to widen the tax base, as is a necessary criterion for future VAT rate cuts. In order to facilitate that goal, the Tax Office will be given new tools, he added.
Pankucsi highlighted the importance of predictability, as something that facilitates decision making, as opposed to a constantly changing tax environment. "Guarantees of stability include a sound budget and sustainable deficit. Tax policy is among the tools required to achieve these, therefore, unnecessary tax cuts will definitely not be approved; on the other hand there is no need to hike corporate tax either," the tax official explained.
The current structure of Hungary's tax regime, in which the bulk of tax revenue comes from consumption and sales taxes, is not going to change, Pankucsi said.
"Whether the specific VAT rates will be subject to change is a budgeting question. In any case, no tax cuts or hikes are being planned right now. We continue to strive for progressively lower taxes on labour," he continued.
"The first step in this process was adopting a flat-rate personal income rate of 16%, which, assuming there is sufficient room for fiscal manoeuvre, could be further reduced. It seems a realistic mid-term goal to aim for a single-digit tax rate," the Deputy State Secretary explained.
According to Pankucsi, the government's objective is to widen the tax base, as is a necessary criterion for future VAT rate cuts. In order to facilitate that goal, the Tax Office will be given new tools, he added.
