Further tax cuts hinge on growth, says Hungary’s economy minister

Budapest, December 23 (MTI) – Hungary’s government could weigh further tax reductions if the country’s economy grows at a steady rate of over 3 percent, Economy Minister Mihály Varga said in an interview published in Friday’s issue of business daily Világgazdaság.

“We’ve taken things as far as they can go, just as the prime minister requested,” Varga said when asked if the government planned further tax cuts on top of recently-announced reductions to the corporate tax and payroll tax.

“I think everybody has reached the limit of their possibilities, both employers and employees. Now we should wait and see the impact on the economy. That’s why I think it’s too early to revisit the budget. We have to see how the first three months turn out. Only afterwards will it make sense to deal with the question of amending the budget. If our expectations are validated and the economy can grow at a steady rate of over 3 percent, then we’ll have the resources for further measures,” he said.

Asked what taxes should be cut if there is fiscal room for manoeuvre, Varga said he was “certain” that taxes on labour should be reduced, but added that it was also a question of whether or not to lower the personal income tax rate.