Hungary: The euro and a tax reform would save us

Banking

The economy research institute GKI Zrt advises the government to take some measures which focus only few areas but suitable for increasing confidence and suggesting reliability, said president András Vértes at a GKI press conference.

The most important ones are a multi-stage tax reform and a credible schedule of Euro adoption. GKI itself sets 2012 or 2013 and suggests that 2009 be targeted as the year of Hungary entering the ERM-II system. Otherwise Hungary might get stuck in a 3% GDP growth, he added. GKI presented its versions of a possible tax reform. A health care card of monthly Ft 10,000, jointly paid by the employer and the employee, could replace health care contribution (EHO) and one type of the health insurance tax in kind. Or the current 36% income tax bracket could be reduced to 28%; in the case of incomes higher than Ft 7.2 million a year it would grow to 40% and the upper limit of the “in kind” health insurance tax would be Ft 12,000 a month. Tax reform would cost the budget Ft 300 billion to Ft 350 billion. GKI also proposes fighting the practice of using company cars for private purposes. There are about 300,000 company cars registered in Hungary, but companies pay public dues on as few as 25,000 ones. (Gazdasági Rádió)

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