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Growth tax credit could add HUF 240 bln to fiscal revenue

Banking

The Hungarian government foresees the growth tax credit adding approximately HUF 239.8 billion to fiscal revenue next year, according to a justification attached to the 2017 budget bill, Hungarian news agency MTI reported yesterday.

The growth tax credit allows companies with fast-growing earnings to defer corporate tax payments on profit increases over a period of two years, MTI noted. 

Next year’s budget bill targets total revenue from corporate tax at HUF 734.7 bln, 83% over the HUF 400.5 bln target planned for this year. The bill would also raise the 2016 target for corporate tax revenue by HUF 289.4 bln to HUF 689.9 bln

The justification notes that revenue from the growth tax credit, which Hungary introduced in 2015, would also “significantly influence” revenue from corporate tax in 2016, but adds that the degree to which eligible taxpayers avail of the deferrals is “difficult to estimate beforehand”, MTI reported.

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