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Competition council recommends simplifying local business tax

Government

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The National Competition Council recommends that the government should amend the local business tax in a way to encourage economic growth, Finance Minister Mihály Varga told the press after the council held its first meeting in 2020 on Tuesday, state news wire MTI reports.

Image: Pixabay

They propose that it should be made possible to write off a bigger part of depreciation or research and development expenses from the tax base as well as eliminating the year-end tax replenishment obligation. The write-off of R&D costs would be five times the present level, Varga said.

They are seeking ways to maintain the momentum of Hungaryʼs economic growth, and the proposed measures are among the possible incentives. 

He admitted that the local business tax is an important source of municipal revenues, bringing in HUF 827 billion last year, and they plan to consult local councils on the proposals.

Varga said he will inform the government of the proposals at the next cabinet meeting. He expects the law to be amended this year and the preferences to take effect by January 1, 2021 the latest.

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