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IBM: tax changes could make Hungary more competitive for service center jobs

Some members of Hungary’s business elite are accepting of the crisis taxes as a temporary solution to decreasing the budget deficit. IBM and the Hungarian Association of Economists are both among them.

“We do not feel the government is against multinationals,” Ferenc Pongrácz, CEO of IBM Hungary said at a press conference introducing its series of talks about how to make Hungary more competitive. “In fact, by lowering the personal income tax rate, it has only done what we have been asking for years.”

Pongrácz feels that a lower tax rate will make Hungary more competitive in fields where there are a high number of highly qualified workers, such as the service centers market. “Previously, it was often the tax rates which weighed against bringing such investments to Hungary,” he added. Pongrácz also mentioned, without giving further details, that he is working on bringing more high-added-value jobs that require professional knowledge and language skills to Hungary as well as more IBM research and development. In fact, IBM has already established one mathematical research center in Hungary at ELTE which is pursuing high-level research. It is one of three such knowledge-centers in Europe with one in Vienna and one in Zurich.

In answer to the BBJ’s question about how the corporation sees the stability of the business environment after the sudden introduction of the crisis tax, Pongrácz replied: “Uncertainty is not a positive thing, but neither is the instability of state finances. We feel that in this case, introducing a retroactive new tax was the smaller evil.”

Árpád Kovács, head of the Hungarian Association of Economists, which is IBM’s partner in organizing the talks, said that most of the members of the association also support the government’s steps to plug the budget gap. “Sector-specific taxes are not a new thing and there are plenty of examples of it in Europe. They were the right thing to do in this situation. It is no accident that the most important members of the business community accept them.” (BBJ)


(This is the corrected version of the article, which originally contained a misquotation.)