Hungary’s government will raise taxes on consumption and property to offset approved tax cuts on labour in 2009 and 2010, Prime Minister Gordon Bajnai said addressing parliament on Monday.
The new property tax, to be levied from 2010 on real estate exceeding 30 million forints (EUR 107,000) in value and possibly on other types of property as well, will serve the aim of social equitableness, Bajnai said, adding that the new tax will only apply to the really well-to-do.
His government adopted 2010 tax drafts last week and parliament is due to vote on the bill early in June.
Changes in personal income tax next year will only mean higher taxes for the top 10,000 earners, while takehome pay will be higher for nine out of ten taxpayers, Bajnai said.
Bajnai said the next government will have to continue cutting taxes to make Hungary more competitive.
Responding to the PM’s address, Socialist group leader Attila Mesterhazy said the Socialist party supports Bajnai government’s implementation of the measures which are fair, reflect left wing values and serve the nation’s interests.
He said the view is accepted that the tax system is too complicated and puts too heavy burdens on average wages and businesses, therefore, it must be simplified and burdens eased.
Parliamentary group leader of the main opposition Fidesz, Tibor Navracsics criticised the prime minister for continuing talk about retaining balance in the country’s economy and noted that the IMF had just recently allowed the Hungarian government to raise the budget deficit target from 2.9 percent to 3.9 percent of GDP this year. He anticipated that the figure could become even worse by the end of 2009.
