Gov’t plans to halve tax preference for wage compensation in 2013

Banking

The government plans to maintain a wage compensation scheme next year, but wants to halve the related tax preference, a senior government official said on Thursday.

The government assumed in the 2013 budget bill that the tax preference would be halved next year, National Economy Ministry state secretary Péter Benő Banai said at an online press conference on Thursday.

Employers who raise the wages of low-earners to prevent a fall in their net wages that would otherwise result from tax changes may avail of the preference. These employers may deduct any amount over a requisite 5% wage rise from payroll contributions.

The tax preference will cost the budget HUF 64 billion next year, down from about HUF 115 billion targeted for this year, Econews calculated based on the budget bill submitted to Parliament on Friday.

The 2013 budget bill has allocated an additional HUF 89.5 billion for the wage compensation of those employed in the public sphere, up from a HUF 64 billion allocation in this year's budget.

Spending on wage compensation of public sector employees will exceed the HUF 64 billion target, Banai told Econews, adding that the overshot will by no means will endanger the 2.2% fiscal deficit target.

Banai noted that in addition to these two main items, next year's budget allocates a further HUF 4.4 billion to compensate those on maternity leave.

Overall, the government earmarks about HUF 160 billion on combined wage compensation next year, Econews calculated based on the 2013 budget bill. The respective target in this year's budget is about HUF 180 billion, excluding the HUF 20 billion the government made available at tenders.

ADVERTISEMENT

Varga puts 2021 GDP growth at 7-7.5% Analysis

Varga puts 2021 GDP growth at 7-7.5%

Opposition parties to begin PM candidate primaries Elections

Opposition parties to begin PM candidate primaries

New managing director at the helm of Wolt Hungary Appointments

New managing director at the helm of Wolt Hungary

Budapest bike-sharing scheme boasts record ridership City

Budapest bike-sharing scheme boasts record ridership

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.