Government tax policy ‘successful’, says economy ministry state secretary

Budapest, December 30 (MTI) – The government’s tax policy has improved the financial situation of families and made it easier for them to buy homes, the economy ministry state secretary responsible for tax affairs told a press conference on Wednesday.

Andras Tallai noted that the government will reduce the personal income tax rate to 15 percent next year from 16 percent, leaving 120 billion forints (EUR 383m) with taxpayers. He said experience has shown that the government was right to introduce the single-rate personal income tax regime. The single-rate tax and family tax benefits left 460 billion forints with families in 2011, 475 billion forints in 2012, 540 billion forints in 2013 and close to 600 billion forints in 2014. The tax policies are set to result in an additional 660 billion forints of disposable income for families in 2015, he said.

The government will increase the monthly tax benefit for families with two children to 25,000 forints, the state secretary said. The tax benefits have reduced taxes for some 1.1 million people, and made 300,000 of them exempt from paying taxes altogether, he said. Tallai noted that the government will double tax benefits for two-child families by 2019.

Tallai said the government expects the reduction of the VAT on newly built residential property from 27 percent to 5 percent to result in the construction sector adding a further 5,000 new homes a year, generating a combined investment of 100 to 120 billion forints.