Comparing data to countries of similar stage of development, the tax burden in Hungary in proportion of the GDP has been remarkably high in the last couple of years. The average tax burden was 33% in the Visegrád countries in 2008, 7% lower than in Hungary. According to the ministry, however, recent changes in the tax system have improved the situation in Hungary: the cut in corporate taxes has reduced the average tax burden to 37.6%, and with the introduction of the flat-rate personal income tax, the ministry expects a further decrease to 36.5%.
The tax burden on consumption and labor was higher than the international average in 2008: 14.5% and 21%, respectively, compared to the EU average of 12% and 17.5%.
At the same time, capital taxes, such as taxes on corporate income or assets, were below the EU average: it was 5.1% in Hungary, with the EU average being 7.5%, the ministry said.
Considering the above, the entire tax structure could be reformed in Hungary by reducing taxes on labor and increasing ecotaxes in order to create a structure which would better stimulate employment, the ministry concluded.
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