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Wage earners to lose most on austerity measures

Banking

Wage earners will lose the most on the government's austerity measures, with an average family of two children paying 100,000 more next year as a result of higher taxes and contributions, the daily Magyar Hírlap said on Friday quoting a new report by Ecostat, the research arm of Hungary's Central Statistics Office (KSH). According to Ecostat, the increase in the middle VAT rate from 15% to 20% that came into force from September will result in Ft 3,000 more monthly spending for an average family, but an additional Ft 8,600 extra spending will result from higher contribution payments affecting employees. At the same time, the increased tax brackets for personal income tax will mean Ft 3,300 less monthly tax payment for the average family. The burdens of those who run their own small business and pay contributions on the basis of the minimum wage will increase by monthly Ft 36,000 as a result of new regulations. According to Ecostat, this is a move to a fairer distribution of burdens. (Mti)

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