The Government will present next year’s tax laws to Parliament on Tuesday, the Government Spokesperson announced at a press conference held together with the Minister of National Economy. Éva Kurucz stressed, in addition to supporting employment and the raising of children, the most important objective of the fiscal system is to boost economic growth. The budget bill will be presented to Parliament by 31 October.
The Government Spokesperson highlighted that in 2015 we shall pay our taxes in the regime of family taxation which is based on the appreciation of work and the raising of children. She added that one of Europe’s lowest tax rates, a 16 per cent income tax is imposed on wages and salaries. By virtue of the family tax benefit, families with children will be able to save some HUF 230 billion in taxes this year, and fiscal savings of a similar magnitude are expected in 2015 as well.
The Government encourages marriage with the introduction of a tax benefit targeting young couples; they will be eligible for an annual tax reduction of HUF 60,000 in the 2 years following the conclusion of marriage. Newly-weds will be able to avail themselves of this benefit already in their first monthly salary next year. The Government is planning to increase the tax benefits provided for families raising two children in order to encourage the birth of second children.
This may be introduced in proportion to the improvement in the country’s economic performance, in several stages between 2016 and 2019 according to the Government’s plans. The passage of the laws that will serve as the basis for these plans will be a task to be completed next year. The Government is planning to double the benefits of parents raising two children gradually, over the course of four years, from HUF 10,000 to HUF 20,000 per child, the Government Spokesperson told the press conference.
Minister of National Economy Mihály Varga said that, in addition to supporting employment and the raising of children, the fiscal system also seeks to boost growth. He highlighted that, as part of its goals, the Government intends to ease the operating environment of businesses, to „whiten” the economy, and to reduce administrative burdens. The corporation tax of local SMEs will remain low; the Government reduced the corporation tax from 19 per cent to 10 per cent up to a revenue ceiling of HUF 500 million in 2011, and this rate will be retained also in the future.
Additionally, a long-term goal of the Government is to introduce a single-rate corporation tax. In the interest of promoting growth, the Government has in recent years shifted the focus of the fiscal system from income-related taxes to taxes imposed on consumption and sales. The government programmes designed to promote employment will continue, including the job protection campaign which has to date permitted the employment of some 890,000 persons.
As of next year, tax benefits will also be available to parents raising young children in respect of part-time employment as part of the job protection campaign. The tax benefit on the social contribution payable by employers will be extended: in the case of part-time employees, employers employing the parents of young children may avail themselves of this benefit up to the limit of HUF 100,000 before tax.
The tax benefit granted in respect of women working part-time will continue to remain available also next year, and the maternity benefit extra will likewise continue which is designed to encourage employers to employ mothers with young children with tax benefits. The Minister of National Economy announced that businesses supporting higher education institutions may avail themselves of a benefit in relation to their corporation tax base next year, while businesses sponsoring spectacle team sports, performing arts and arts organisations, and Hungarian motion pictures will be eligible for tax benefits similar to this year.
Mihály Varga highlighted, the Government will set up an electronic road goods traffic monitoring system, the purpose of which is to keep track of the actual path of goods and to ensure that goods that were not previously reported to the tax authority cannot be offered for distribution in Hungary. The Minister pointed out, the sector-specific levies will remain in force, and the Government will propose the extension of the telecommunications tax to Internet services.