ADVERTISEMENT

FinMin submits bill reducing payroll tax

Government

Hungary's Finance Ministry has submitted a bill to lawmakers that would reduce employers' social security contribution by 2.5 percentage points and scrap the 1.5-percentage point vocational training contribution from January 1, 2022, according to a report by state news wire MTI.

The combined four-percentage-point reduction in employers' tax burden on labor to 13% was a condition of an agreement reached earlier in November to raise the minimum wage by over 19%.

The minimum wage for unskilled workers is set to rise to a gross monthly HUF 200,000, while the minimum wage for skilled laborers climbs to HUF 260,000 from the start of next year.

The bill tabled by the ministry would also reduce the small business tax (KIVA) rate by one percentage point to 10pc and the simplified contribution to public revenues (EKHO) from 15.5% to 13%.

The bill would extend local business tax (HIPA) relief to SMEs into 2022.

As part of coronavirus crisis relief, the central government halved the local business tax in 2021 for companies with annual turnover of under HUF 4 billion and fewer than 250 people on payroll. The central government automatically compensated settlements with fewer than 25,000 residents for revenue loss because of the measure, while compensation for larger cities was weighed on a case-by-case basis. 

The bill would double the annual top-up cap for baby bonds, a high-yield security available to newborn Hungarians since 2006, from HUF 6,000 to HUF 12,000.

ADVERTISEMENT

Digitization, sustainability among characteristics of future... Analysis

Digitization, sustainability among characteristics of future...

Lawmakers approve residency permit for digital nomads Parliament

Lawmakers approve residency permit for digital nomads

Magyar Bankholding chairman to serve as CEO as well Appointments

Magyar Bankholding chairman to serve as CEO as well

ITM, capital gov't agree on support for public transport City

ITM, capital gov't agree on support for public transport

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.