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Higher taxes would be “toxic” for Hungary’s export-oriented economy, Prime Minister Viktor Orbán said on Friday commenting on an international initiative to introduce a minimum corporate tax rate.

Orbán told public radio Kossuth that “it is in the national interest of Hungary not to accept externally imposed tax regulations”.

The prime minister said a tax system that makes Hungary competitive is the “starting point” for the country’s economic success.

The upcoming period will be dedicated to recovery and not to the accumulation of reserves, he said.

The year ahead must be used for “restoring the strength” of families, paying the next part of 13-month pensions, introducing tax exemption for young people and, once the rate of economic growth reaches 5.5 percent, paying back taxes, Orbán said.

Orbán: Low-earning Parents Could Reclaim 2021 PIT if Economic Growth Reaches 5.5%
Orbán: Low-earning Parents Could Reclaim 2021 PIT if Economic Growth Reaches 5.5%

The government's aim is to raise the minimum wage to 200,000 forints (EUR 575), the PM also announced.Continue reading

Commenting on a European Union initiative to introduce a minimum corporate tax rate, he said “it is in the national interest of Hungary not to accept externally imposed tax regulations”. Orbán said the “starting point” for the country’s economic success was a tax system that makes Hungary competitive.

“Tax increases are toxic for the Hungarian economic system,” he added.

“Now is not the time to set aside reserves, now is the time for recovery,” he said.

Orbán said the time is right to continue the gradual reintroduction of an annual pensioners’ bonus, to roll out a personal income tax exemption for Hungarians under 25, to give families raising children a growth-linked tax rebate, and to agree with businesses on conditions for raising the monthly minimum wage to 200,000 forints, once economic growth reaches 5.5 percent.

He pointed out that the 2022 budget targets a modest decline in year-end state debt, relative to GDP, but said the timing is not right to “radically” reduce that indicator.

Featured photo by Szilárd Koszticsák/MTI