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Varga Reveals Budget Plans For 2015

Tamás Székely 2014.10.22.

The government is not planning to change the taxation rate for companies next year but the long-term goal is to have a flat-rate tax, Mihály Varga, the economy minister, told a press conference. Presenting details of the government’s taxproposals, Varga said that smalland medium-size ventures wouldcontinue to pay a 10% corporate tax, and large companies 19%. The long-term plan is to introduce a flat rate corporate tax depending on the country’s economic output, the minister said. Answering a question, Varga said the government has maintained its position that the flat personal income tax should also be reduced to below 10% before the end of the government cycle. He added, however, that this will not be possible in 2015, when the government will focus on boosting economic growth.

The bank levy and tax on advertisements will remain in place, and the telecommunications tax will be extended to internet service providers. In the long term, the government envisages discounts off the bank levy for expanded lending with a view to increasing investments,he said. But this will not be a possibility in 2015, he added. Mihály Varga said the government intended to introduce an electronic system for verifying cargo shipments by road with the aim of cracking down on VAT cheats. Preparations are under way and the system is scheduled to be on Jan. 1. The value-added tax rates will not change either, with the exception of VAT on large animals, which will be lowered to 5 percent, similar to the earlier reduction for hogs, Varga said.

Next year’s tax laws will be tabled in parliament on Tuesday, government spokeswoman Éva Kurucz said at the press conference. Kurucz also announced that thegovernment would provide a tax incentive for young couples to getmarried. For the first two years, newlyweds would get a tax reduction of a monthly 5,000 forints. She said that the scheme would leave a total of 230 billion forints with families both this year and in 2015.To encourage couples to have children, the government plans to gradually double the per-child tax incentive between 2016 and 2019, she said, adding that preparations for the move are under way.

via photo: Károly Árvai (