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New government to abolish or merge 12-16 tax categories

Hungary's new Fidesz-controlled government will either eliminate or consolidate 12-16 of the current 52 tax categories as part of its three-year tax-reduction program scheduled to begin on July 1, National Economy Minister designate György Matolcsy said on a television program.

He said they work on a state scheme helping clients to convert FX loans into forint loans. Matolcsy said that the government would eliminate the so-called super gross-up of net wages (which added social security contributions paid by employers to the personal income tax base), adding that it would also make modifications to the personal income tax, the company tax and tax contributions.

The minister-designate remarked that the Fidesz government will reduce bureaucracy through its tax moves, citing a recent estimate that tax related bureaucracy costs the country HUF 2,800 billion (almost 10% of GDP). Matolcsy said that social security contributions paid by employers should be reduced by 5-10 percentage points, adding that the pace of these cuts would depend on the results of the new government's review of the budget.

Matolcsy said that the new government's objective will be to reduce the total tax burden by about one-third. (MTI - Econews)