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Audit Office head sees room for gradual tax cut

Banking

The head of Hungaryʼs State Audit Office (ÁSZ) sees room for a gradual reduction in the 15% personal income tax rate, state news wire MTI reports citing daily Magyar Hírlap.

"In my opinion, the current economic conditions allow for a further reduction of the personal income tax in two or three steps," László Domokos said in an interview published in Thursdayʼs issue of daily Magyar Hírlap.

He said the 1.5% vocational training contribution paid by employers could also be cut to 0.75%-1.0% in light of the lower number of job-seekers, and he made a case for eliminating the 15% tax on interest.

"It isnʼt normal that we tax savings, but not high-interest, high-risk personal loans. There should be incentives for savings that mature in six months or less, too," Domokos said.

He said cutting the 27% VAT rate "wouldnʼt be worth it" as consumers would benefit not at all or only temporarily from such a measure. He added that VAT is the "most equitable" tax form as wealthier households which consume more also pay more VAT.

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