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Hungary: Cautious support for tax-cut package

The LIGA and MSZOSZ trade unions and the leader of the National Association of Entrepreneurs and Employers (VOSZ) voiced reserved support for the Gyurcsány government’s tax-cut package announced on Wednesday.

VOSZ Secretary General Ferenc Dávid told MTI on Wednesday that the broad outlines of the government’s tax-cut proposals are acceptable, though the package should be elaborated and its mode of introduction debated. David added that the proposed Ft 1,200 in tax cuts contained in the government’s package should be made not over a period of three or four years, but in one or two installments by 2010.

David said it was peculiar that Prime Minister Gyurcsány’s tax-cut package contains no reduction in government expenditures, whereas, in his opinion, the government could save a great deal of money in this domain, particularly in the operation of local councils and state-owned companies. Dávid noted that the proposed tax-cut package does not address the issues of taxation on minimum wages and what will become of the value-based real-estate tax and the local business tax.

The LIGA trade-union organization said in an announcement sent to MTI late on Wednesday that it deemed the tax and contribution cuts contained in the government’s package to be cautious and dependable, adding that the proposals were more moderate than the organization had expected. The LIGA announcement stated, however, that “In addition to the fact that we regard the practicability of certain measures contained in the package to be uncertain, we view as outright unacceptable the question of tax amnesty.”

Trade union association MSZOSZ President Péter Pataky remarked on Wednesday that the government’s tax-cut proposals represented a solid basis for further negotiations, noting that the package contains several elements already proposed by MSZOSZ. “I think that this is a more cautious and realistic approach” Pataky said of the package. Pataky added that negotiations regarding the scope and timing of the proposed tax cuts would not be easy, though consensus could be reached on one or two points contained in the package. (MTI-Econews)