Economy Ministry mulls payroll tax reduction

Banking

Hungaryʼs Ministry for National Economy is weighing a possible reduction in payroll taxes, Economy Minister Mihály Varga was quoted as saying in yesterday’s issue of conservative daily Magyar Idők, Hungarian news agency MTI reported.

Economy Minister Mihály Varga at an August 12 press conference in the Economics Ministry (Photo: MTI/Zsolt Szigetváry)

“Payroll taxes [in Hungary] are higher than the European Union average, which could put the country at a competitive disadvantage,” the minister said. “On this basis, it appears that deliberations on a reduction in payroll taxes are inevitable,” he added. 

According to Varga, the Hungarian government has less room to maneuver in terms of payroll taxes, as the revenue they generate must cover healthcare and pension expenditures.

“Weʼve balanced the healthcare and pension funds only after years of hard work... It would be a mistake to endanger this balance,” Varga said.

The National Association of Entrepreneurs and Employers (VOSZ) said later yesterday that they would support a proposal to lower payroll taxes, MTI reported.

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