Though there is no possibility for radical tax cuts, there is a need to start a tax reform that significantly reduces payroll taxes, Prime Minister Ferenc Gyurcsány said.
At the same time, care must be taken to ensure the country's financing - overall tax revenue cannot be allowed to fall, Gyurcsány said. If payroll taxes are reduced, new budget revenue will have to be found, he added.
Shock therapy can not be used in tax matters, rather a decisive, but well-balanced, policy has to be followed, Gyurcsány said. It is important for state spending to fall gradually but significantly - by 4-5 percentage points of GDP - in the next 3-4 years, he added.
After meeting with economists on Monday Gyurcsány said that substantial reductions in taxes and contributions are necessary.
The government will propose tax, contribution and employment reform, Gyurcsány said. Substantial changes and a significant correction in scale are necessary, he added.
There was no argument at the meeting on Monday that the tax burden on labor must be reduced, Gyurcsány said. All of the economists proposed that an economic and social program extending for 3-4 years should be created, regardless of the general elections to take place in 2010. (MTI – Econews)