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Gov't plans HUF 1,000 bln tax restructuring

The government plans a HUF 1,000 billion restructuring of the tax system that will eliminate many tax preferences, raise the VAT rate by a moderate degree and introduce a uniform tax on assets, Prime Minister Ferenc Gyurcsány said at an extraordinary session of Parliament.

Personal income tax and social security contributions must be cut significantly, and the “solidarity” tax must be scrapped, Gyurcsány said.

MPs of Fidesz and KDNP remained in the chamber while Gyurcsány spoke, as earlier promised.

At the same time as the tax system is restructured, the government wants to restructure the country's system of social and welfare support, for example, by making family subsidies liable to tax, Gyurcsány said. The family subsidies will be raised, which will give low earners and households with average income about the same amount as before, while high earners will pay more tax on their subsidies.

The system has to be restructured so those who need more get more, he said. The social system must be more focused, it should not treat high- and low earners alike. (MTI – Econews)