Hungarian Parliament Endorses 15% Tax Cuts in 2016 budget

BUDAPEST: Hungary’s National Assembly has passed a package of tax measures that accompanied the 2016 Budget, introducing several tax cuts.

The most significant of the measures, to be introduced from 2016, is a cut to the rate of personal income tax, from the existing 16 percent rate to 15 percent. Tax allowances for families with children will also be increased. Taxpayers with two children may reduce their taxable income by up to HUF12,500 (USD45), up from HUF10,000. The Government hopes to further increase this to HUF20,000 per child by 2020.

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The value-added tax (VAT) rate on pork will fall from 27 percent to five percent. The Government is also considering further VAT cuts for a greater range of foodstuffs, such as poultry. The package also cuts the rate of bank tax. The Minister for National Economy Mihály Varga said the tax cuts will reduce the tax burden of individuals and businesses to the tune of HUF230bn.

The Government may also introduce tax holidays for companies that invest in public utilities and tax breaks for certain medical practitioners.