ADVERTISEMENT

Gov’t proposes raising minimum wage, cutting payroll taxes

Banking

Photo by Pixabay

The Hungarian government is proposing a 15% raise in the minimum wage of unskilled workers for next year and a further 8% raise in 2018, economy minister Mihály Varga said on Friday, following a consultation with employers and employees representatives, Hungarian news agency MTI reported.

Payroll taxes could be cut by four percentage points in 2017 and a further 2 pp in 2018, Varga added. 

For jobs requiring skilled labor, the minimum wage could grow by 25% next year and by 12% in 2018.

The monthly minimum wage is currently HUF 111,000 for unskilled workers and HUF 129,000 for skilled workers.

The government is also proposing that, starting from 2019, payroll taxes could decrease by 2 pp annually for four years if real wage growth reaches an annual 6%.

Varga said the government believes that in this six year cycle real wages could rise by 40% in total, but this should not threaten the performance of the economy.

The government is interested in reaching a resolution that is acceptable to all parties involved and hopes that this proposal could be a base for a solution. The minister said the government wishes to sign an agreement for six years that would ensure everyone could plan ahead, and it will continue talks in the next few days.

Following the consultation meeting László Kordas, the head of the unions association MaSzSz, said that every actor representing employees considers the governmentʼs proposal a step in the right direction. However, Ferenc Rolek, deputy chairman of national business association MGYOSZ, warned that the governmentʼs proposal could not be carried out in its current form, and especially not the parts concerning 2017, but it still welcomed the governmentʼs desire to reach an agreement covering more than one year.

ADVERTISEMENT

IMF raises Hungary 2021 GDP growth forecast to 7.6% Analysis

IMF raises Hungary 2021 GDP growth forecast to 7.6%

Parliament approves amendment to Competition Act Parliament

Parliament approves amendment to Competition Act

New CEO announced at Codic Hungary Appointments

New CEO announced at Codic 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.