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FinMin says no decision yet on tax package

  Finance Ministry press chief Ferenc Pichler told MTI that the government had not yet decided on tax changes drawn up by the ministry when asked about alleged details of the package published by news portal on Monday.


The Finance Ministry is preparing several tax changes for the government, but no decision has been made yet, Pichler said. The tax package is expected to be revealed at a parliamentary session on February 16, he added, noting that Prime Minister Gyurcsány had revealed the direction of the changes to Parliament already on January 29.

Index reported that he government will propose cutting the payroll tax six percentage points, but raising the monthly healthcare contribution from HUF 1,950 to HUF 5,100 from July 1, 2009.

The main VAT rate would rise from 20% to 23% from July 1, and the excise tax on petrol, diesel, cigarettes and alcohol would increase by five percentage points. The government will propose scrapping the “solidarity tax”, but raising the corporate tax from 16% to 19%, while widening the tax base, from the start of 2010.

Some changes to the personal income tax could be made from July 1, but from the start of 2010 the lower personal income tax rate will rise from 18% to 19% and the upper rate will rise from 36% to 38%. The threshold between the two will be raised to HUF 3 million. Most personal tax preferences will be eliminated.

The government’s tax package would make benefits, such as family subsidies, subject to tax from July 1, 2009. Though benefits would be raised, canceling out the effect of change for low-income households. (MTI-Eco)