Parliament approved amendments of the tax packages for the 2016 budget, which has created the possibility for next years budget to be that of tax cuts, said Minister for National Economy Mihaly Varga after the main budget figures were approved.
Revenues and expenditures were upped by HUF 10.8 bn, but the budget deficit target was left unchanged at HUF 761 bn.
The tax cuts will leave HUF 230 bn in extra revenue at families next year alone, as the personal income tax rate will drop to 15% from 16% and VAT on pork will decline to 5%. In the next four years tax benefits after each child will double to HUF 20,000. Households on minimal wage raising two children will save HUF 85,000 next year as a result of the tax rules. Since the launch of the flat tax in 2010, families have saved HUF 1.3 trillion, Varga stressed.
As part of the agreement with the EBRD, banks will pay HUF 60 bn less bank tax and those financial institutions with a higher stock of corporate loans compared to 2009 will be entitled to reduce their tax base.
Opposition parties voted no the tax amendments, saying the flat personal income tax scheme is unfair and has only widened the gap between the working people and those with high income. Households are not feeling the benefits of stronger economic growth, Jobbik said. They proposed to slash the tax on basic food stuff and child care products.
