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Convergence program includes pledge for tax reform

Banking

A pledge for a tax reform was included in the convergence program approved by the government on Thursday, Finance Minister János Veres said Thursday evening on Hungarian public television.

Otherwise, the final program included only minor changes compared to the published draft. Veres said the reform would raise consumption-related taxes while reducing personal income tax, but structural changes would shift a greater burden to the wealthy. The pledged reform would change the tax structure without affecting the central budget's overall tax revenue or the tax share of GDP targeted in the earlier published draft program.
The changes in the tax structure were recommended by the Convergence Council, a body of experts advising the government on Hungary's preparations to adopt the euro, in an assessment they published on the draft program on Tuesday. The council said Hungary should reduce the share of income and labor-related taxes and raise consumption-related taxes as well as taxes on the wealthy in order to improve Hungary's competitiveness.

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