Bill would raise 2017 revenue, expenditure targets by HUF 420 bln

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Hungaryʼs government submitted a bill to Parliament late Tuesday that would raise the revenue and expenditure targets in the 2017 budget by HUF 420.2 billion, Hungarian news agency MTI reported. The cashflow-based deficit would remain unchanged at HUF 1.166 trillion.

The bill would top up fiscal reserves for "extraordinary government measures" by HUF 10 billion to HUF 120 bln. It would also add HUF 55.9 bln to the National Protection Fund, bringing it to HUF 115.9 bln.

Expenditures of the National Development Ministry would rise by HUF 75 bln. Spending allocations of the Defense Ministry and the Ministry for National Economy would be raised by HUF 10.8 bln and HUF 9.8 bln, respectively. Debt servicing expenditures would drop by HUF 53.8 bln.

On the revenue side, corporate tax would bring in HUF 139 bln less, generating HUF 595.7 bln, while revenue from sales of state-owned farmland would reach HUF 167.9 bln, well over the original target of HUF 5.5 bln. The bill would allocate HUF 24.1 bln for a pensionersʼ premium.

Minister for National Economy Mihály Varga said earlier on Tuesday that pensioners would get the premium in addition to an inflation-linked top-up.

In an update of the countryʼs Convergence Program released yestersday, the government said a six-year agreement on wage rises reached with employers and unions late in 2016 "gave new impetus to economic growth". As a result of the deal — which reduced the payroll tax and the corporate tax, while raising the minimum wage — revenue from taxes on personal income and consumption are expected to rise at a faster rate than revenue from payroll tax, it added.

Amendments to this yearʼs budget act will allow additional expenditures for road renovation, preparations for state investments, implementing an action plan for local suppliers of multinationals, rail network developments, charities, creches, the upgrade of a hospital in Budapest and the renovation of the Hungarian Armyʼs fleet of Mi-24 helicopters, the government said. Spending on migration and the increased risk of terrorism is expected to raise expenditures in this yearʼs budget by HUF 100 bln, it added.

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