Room seen for HUF 120 bln in 2016 tax cuts
Árpád Kovács, the head of the Fiscal Council, told state-owned news channel M1 this morning that he expects the 2016 budget to offer some HUF 100 bln-120 bln of wiggle room for tax cuts. He added that Hungaryʼs GDP growth could be 2.5%-3.5% in 2015.
According to Kovács, experts projected consumption to grow by about 2% in 2015 and maybe in 2016, as well. This is due to consumer purchases postponed during the economic crisis picking up again, he said. Construction projects helped by EU funding programs have also been beneficial, he added.
The 2016 budget draft was submitted to Hungarian parliament on Tuesday. It predicts a 2.5% GDP growth for the next year, and expects the budget deficit to be 2%. The draft includes tax reductions, precisely the personal income tax is expected to be cut from 16% to 15%, while the VAT rate on unprocessed pork would be cut from 27% to 5%.
Hungaryʼs Poultry Products Council said it believes that the dramatic cut proposed for the VAT on unprocessed pork is unfair, as the measure will put poultry farmers at a disadvantage and make competition difficult. The council said that the average Hungarian consumes 32 kg of poultry and 28 kg of pork a year. According to data by the Central Statistics Office, since 2012, Hungarians have consumed more poultry than pork meat.
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