Parliament started debate on Wednesday of a government tax package that would reduce the tax burden for companies and private individuals in steps to be carried out over several years.
The government’s package would reduce payroll costs by about two percentage points on average, Finance Minister János Veres said in Parliament.
The proposed amendments to the tax and contribution law would reduce payroll costs for twice the gross minimum wage, or Ft 138,000 a month, by Ft 5,520, Veres said, giving an example. From April 1, payroll tax will be reduced 4 percentage points on double the minimum wage: the social security contribution will drop 2.5 percentage points to 26.5% and the employer’s contribution will fall 1.5 percentage points to 1.5%.
The corporate tax would be raised to 18% from 16% under the package. Accounting rules for unincorporated companies with annual revenue under Ft 100 million would be simplified. The government wants to raise the threshold for the 18% income tax bracket from Ft 1.7 million a year to Ft 2 million, a measure that will save money for 40% of taxpayers, Veres said. The proposals would also unify personal income tax benefits. The proposals would raise the excise tax on vehicle fuel by 10%. The 35% dividend tax would be scrapped, but income from dividend would be taxed at 25%, the same rate as for interest income. The package would introduce an asset-type tax on corporate vehicles.
The package would reduce the corporate tax burden by Ft 122 billion and the burden for private individuals by Ft 45 billion, Veres said. The measures will be covered by additional budget revenue, a cut in expenditures and changes to the tax system, he added. (MTI-Econews)