Government submits amendment raising budget revenue, expenditures by HUF 407 bln
Hungaryʼs government submitted an amendment to Parliament late yesterday that would raise the expenditure and revenue sides of this yearʼs budget both by HUF 407.3 billion, Hungarian news agency MTI reported.
The bill would raise the revenue target from HUF 15.8 trillion to HUF 16.208 tln. It would increase expenditures from HUF 16.562 tln to HUF 16.969 tln.
The cashflow-based deficit would remain unchanged at HUF 761.6 bln.
The higher expenditures will be covered by “the transfer of the base effect of higher tax revenue from processes in 2015” as well as “favorable trends in 2016”, according to the justification of the bill, submitted by National Economy Minister Mihály Varga.
The bill would raise targeted revenue from corporate tax by HUF 289.4 bln to HUF 689.9 bln. The target for revenue from VAT would be increased by HUF 37.0 bln to HUF 3.389 tln and the target for revenue from excise tax by HUF 29 bln to HUF 981.2 bln. Revenue from personal income tax would climb by HUF 36 bln to HUF 1.694 tln. Revenue from duties on households would increase HUF 16.1 bln to HUF 137.8 bln.
It attributed the higher revenue from taxes and contributions to economic growth, higher wage payouts and improved taxpayer morale resulting from a government crackdown on the shadow economy.
The text said “one of the most important reasons” for the fiscal amendments is clearing up budget problems at KLIK, an institute established to oversee education in Hungary. With the bill, the government aims to ensure that the system of maintaining state schools can fulfil tasks without interruption and without debt, according to the justification.
The bill raises support for KLIK by about HUF 91.5 bln to HUF 640.8 bln.
The bill would allocate HUF 50 bln in additional spending for the “Modern Cities” development program.
It would establish separate allocations for spending to manage “mass migration" as well as for “anti-terrorism measures”. The allocations could be exceeded with the approval of the government.
The allocation for managing mass migration is HUF 1 bln in the bill. The allocation for anti-terrorism measures is HUF 10 bln.
The bill would boost the allocation for the governmentʼs recently launched program of home purchase subsidies for families with children by HUF 50 bln to HUF 154 bln.
It would allocate HUF 69.3 bln for repaving roads.
A combined HUF 6 bln would be allocated for “temporarily ensuring and supporting liquidity for public transport in suburban areas around Budapest”.
It would raise reserves in the budget by a combined HUF 30 bln.
Many of the changes were already detailed in a statement on Thursday by the National Economy Ministry. In the release, the ministry said that favourable economic trends in the past months point to a “significant revenue surplus” over the earlier budget target, leaving the government with “close to HUF 500 bln” in additional resources.
In a separate statement, also released on Thursday, the Fiscal Council said it had “no fundamental objections” to a draft bill affecting the fiscal changes.
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