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Hungary budget projects 2.5% economic growth in 2016

Hungary budget projects 2.5% economic growth in 2016

BUDAPEST: Hungary’s Minister for National Economy, Mihály Varga, has put some flesh on the bones of his Government’s pledges on tax cuts.

Varga, giving details of the draft budget to be submitted to Parliament on May 13, 2015, emphasized that the country’s projected economic growth of 2.5 percent will enable tax cuts aimed particularly at families and the lower paid. In 2016 the personal income tax rate is planned to be cut from 16 percent to 15 percent and family tax allowances for people with two children will double by 2019. VAT rates on certain foods will also be reduced; in particular the rate on pork will be cut from 27 percent to 5 percent.

In exchange for accelerated lending, he added, the Government will lower the bank tax, from 0.53 percent of balance sheet total to 0.31 percent in 2016. Other sectoral taxes are not planned to be modified, he stressed. There are no plans to lower the rate of corporate income tax.