Cutting payroll and corporate taxes could improve Hungary’s competitiveness, and the resulting gap in budget revenue could be filled with the introduction of taxes on assets and a VAT increase, head of the Deloitte consultancy said.
A ten-percentage-point reduction in payroll taxes could save companies Ft 800 billion, and the elimination of the “solidarity tax,” introduced in 2006, would save a further Ft 200 billion, Péter Oszkó said.
The budget shortfall could be made up for with the introduction of a property tax and raising the main VAT rate to 23% from 20%. Though the main rate will rise, VAT on a special group of “price-sensitive” products might be lowered to 5%, he added.
Oszkó noted, that taxes and contributions are equivalent to 40% of Hungary’s GDP, well over the 29% rate in Slovakia and the 34% rate in Poland. (MTI – Econews)