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Minimum wages taxed again

The same coalition that had abolished tax on minimum wages more than four years ago is to reintroduce the levy from next year on. Officials of the Finance Ministry have stated that the dual system of tax deductions will stay level while the minimum wage itself will be raised, as agreed at The National Council for the Reconciliation of Interests (OÉT). The deductions have so far in effect zeroed personal income tax levied on the minimum wage, but recent measures resulted in a 0.7% tax for 2007 (this means Ft 450 off the Ft 65.500 minimum wage), and a further rise to 1.5% by 2008 (it is Ft 1080 off 69.000). Analysts and tax experts have long deemed the abolition of the tax-free minimum wage necessary, as the present framework can be partly blamed for 44% of income returns declared around or below the currently set minimum wage. (Világgazdaság)