The economic recovery has already begun, as also indicated by the application of the tax concessions relating to sectors that have been most adversely affected by the epidemic.
“While such tax concessions were validated with respect to 169 employees in April, this number increased to 191 thousand in June”, the Ministry of Finance’s State Secretary for Tax Affairs Norbert Izer informed Hungarian news agency MTI. “The economy protection measures introduced extremely rapidly by the government have played a significant role in facilitating economic recovery”, Mr. Izer declared.
“Based on data from the tax office, one of the most successful of these measures was the four-month concession relating the payment of employer contributions, aimed at protecting the workplaces of people employed in sectors that were most adversely affected by the epidemic”, he added.
The State Secretary pointed out that the sectors that were most adversely affected by the crisis situation that developed because of the coronavirus pandemic (such as tourism, hospitality and agriculture) received immediate assistance from the government, thanks to which enterprises only had to pay personal income tax and a maximum of 7710 forints (EUR 22) a month in health insurance contributions with respect to their employees.
“In practice, this meant that in the case of a skilled labourer earning the minimum wage, the state budget waived the payment of some 71 thousand forints in contributions each month to enable enterprises to preserve the workplaces of their employees”, Mr. Izer emphasised. “As a result, employment became significantly cheaper for enterprises, and employees also received a good deal in view of the fact that their net earnings increased. Based on the received tax returns, over 21 billion forints (EUR 60.8 million) remained in the pockets of people employed in sectors that were most adversely affected by the epidemic”, he explained. “The tax concession was also valid for enterprises who pay small business tax (KIVA)”, he underlined. “The four-month tax concession left a total of over 1.1 billion forints (EUR 3.18 million) in the pockets of companies that pay the KIVA tax. Compared to the first quarter, four hundred additional KIVA enterprises (a total of 3143) made use of this tax concession aimed at sectors that were most adversely affected by the epidemic”, he detailed.
“Accordingly, the measure achieved its goal, in view of the fact that jobs were successfully preserved even in sectors that were most adversely affected by the economic effects of the pandemic, and in fact the number of workplaces were successfully increased month by month”, the State Secretary declared.
“One of the greatest achievements of the government’s rapid and effective economy protection measures is the tangible decrease in the number of job seekers, and the fact that Hungary remains one of the European Union’s member states with one of the lowest rates of unemployment”, he stated, adding that the age subsidy programs, the new loan opportunities and training programs provided by the Economy Protection Action Plan, and the various tax concessions have assisted a total of over one million employees.