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Hungarian firms mull repatriating after tax cuts

Hungarian companies registered in Slovakia are considering returning to their home country once Hungary's new government fulfils its pledge to cut company taxes, the Slovak daily Hospodarske Noviny reported.

The paper cited Ferenc Dávid, the head of the National Association of Entrepreneurs (VOSz), a business organization in Hungary, who estimated that several hundred Hungarian firms would return to Hungary. Even Slovak firms are considering following suit, he said.

The paper said the decisive factor for a move to Hungary is the plan to cut the business tax to 10% from 19%, and personal income tax to 16% from next year.

“If taxes are lowered, I'm definitely going home,” one Hungarian businessman told the paper.

Martin Hosek, a representative of a Slovak business grouping similar to VOSz, said, however, he did not think companies would be leaving en masse.

“Taxes are just one of the indicators. Conditions of taxation and the legal environment are also important, as well as the quality of the labor force,” Hosek said, adding that Slovakia was still an attractive destination. But he commended the economic plans of Viktor Orbán's center-right Fidesz government, which he said were beneficial to neighboring countries as well.

Radovan Durana of the Slovak Economic and Social Research Institute INESS said that if Hungary managed to push through the measures, this would benefit investors and the business climate in general. (MTI – Econews)