Gov't mulls support for muni councils hit by min wage rise

Government

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Finance Ministry state secretary Péter Banai and the chairman of county seats association MJVSZ Károly Szita discussed possible central government support to ease the burden on local councils of a more than 19% increase in the minimum wage from the start of the year, the Finance Ministry said on Wednesday, according to a report by state news wire MTI.

The minimum wage for unskilled laborers now stands at a gross monthly HUF 200,000, while skilled workers must be paid HUF 260,000.

The Finance Ministry said the sides also discussed compensation this year for municipal councils that are in a squeeze because of local business tax relief rolled out by the government for the second year in a row.

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 bln. The measure was extended through 2022. The central government is automatically compensating settlements with fewer than 25,000 residents for revenue loss because of the measure, while compensation for larger cities is being weighed on a case-by-case basis.

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