The Hungarian cabinet wants to remain “the government of tax cuts” and over the coming years wants to introduce the biggest cuts in administrative burdens related to taxation, the finance minister said on Thursday.
Hungary’s economic indicators have been positive for years now, and last year’s growth rate may even exceed 4.6 percent, Mihály Varga said at an event reviewing the activities of the National Tax and Customs Authority (NAV) over the past year. He said the 5.2 percent growth registered in Q3 was the third largest rate in the European Union, adding that certain analysts project growth to exceed expectations again this year. But Varga warned that global economic growth was beginning to pass its peak, and said it was worth preparing for a slowdown.
Measures should be introduced to preserve the country’s economic achievements, he added. The minister said NAV would have an important role to play in this, noting that taxes account for 95 percent of budget revenues.
Though the government introduced a number of tax cuts last year, this has not put a dent on revenues, Varga said, pointing out that budget revenues last year were up by 851 billion forints (EUR 2.7bn) from 2017. And this year NAV will have to find a way to take in 1.065 billion forints more, he said, pointing out that a planned 2 percentage point reduction in the social contribution tax alone would leave more than 130 billion forints with businesses.