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Trade Union Association (Maszsz) has called for the flat-rate personal income tax to be abolished, as doing so would ease the burden on low earners.

A progressive system, instead of the current 15 percent flat rate, would help to close the gap between the average and median wage as well as reducing the number of employees earning the minimum wage, Maszsz head László Kordás told a conference on Monday.

Kordás noted that effects of the six-year wage agreement and wage hikes will be the topic of consultation forum of the private sector and the government on Tuesday.

Analysis by Policy Agenda shows that 69 percent of employees earn below the average wage, Ambrus Kiss, the firm’s lead analyst, said.

Policy Agenda estimated the median wage, which divides the income distribution into two equal groups, to be 242,000 forints (EUR 744) gross in 2018, while the Central Statistical Office (KSH) put the average wage at 327,486 forints (EUR 1,008) in May 2018, Kiss said.

Besides reverting to a multi-bracket taxation system, the government should aim to shift the economy from supplying developed economies to strengthening its R+D sector, Kiss said.

via MTI