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Varga outlines economic measures in effect from 2020

Banking

Alexandros Michailidis / Shutterstock.com

Finance Minister Mihály Varga reminded Hungarians of government measures soon to come into effect designed to cushion the impact of the global slowdown on the local economy in a Facebook message posted on Tuesday, state news wire MTI reports.

Mihály Varga (Photo: Alexandros Michailidis / Shutterstock.com)

Among the measures coming into force from January 1, 2020, Varga noted a reduction in the Small Business Tax (KIVA) rate from 13% to 12% that will affect some 45,000 businesses.

The KIVA rate is well over the 9% corporate tax rate, but KIVA companies enjoy a number of exemptions.

Varga said a reduction in the VAT rate for commercial accommodations from 18% to 5% would leave HUF 32 billion with local tourism businesses.

He added that a suspension of the advertising tax until the end of 2022 would support an expansion of the market.

Next year the Simplified Business Tax (EVA) will be eliminated and all four employee contributions will be combined into a single, 18.5% social insurance contribution.

At present, employees pay a 10% pension contribution, a 4% in-kind health insurance contribution, a 3% cash health insurance contribution and a 1.5% labor market contribution.

Varga also mentioned the launch of an annual HUF 17 bln allocation to support irrigation investments and an increase in spending on R&D.

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