There is a need and a real possibility for tax cuts in Hungary, said Finance Minister János Veres at a conference organized for the largest tax-payers.
On the proposal of the Economic Competitiveness Roundtable to reduce social security contribution by 10% by 2009, the Minister declared, that he saw the proposal unfeasible. A one-percent reduction costs Ft 80 billion, and there will be a margin of around Ft 250 billion in 2009, he added, so further cuts in expenditure would be needed. On local business tax (hipa) Veres said, that there are new proposals to change this tax gradually. The government revenue from hipa will reach Ft 500 billion in 2008, because several foreign companies lost their former tax preferences. The Finance Minister sees a real possibility for a much higher GDP growth in 2008, due partly to a more effective use of EU funds and, on the other hand, to higher private economy activity. (Gazdasági Rádió)