BUDAPEST: The Hungarian Government will ignore the tax recommendations included in a report from the OECD that it should make the tax regime more progressive and expand indirect taxes, the Deputy State Secretary for Taxation, Zoltán Pankucsi, said.
The OECD report highlighted how income inequality is growing in many European countries and urged governments to tackle the problem by making their income tax regimes more progressive. However, Pankucsi rejected these conclusions in an interview with Hungarian television channel M1 and argued that Hungary’s flatter tax system, introduced in 2011, “has delivered the expected results.”
“There is no reason at all to substantially change the already well-established system concerning either the personal income tax or any other levy,” he said.
Hungary has one of the lightest income taxes in the European Union, with corporate income up to HUF500m (USD1.7m) taxed at just 10 percent, and the remainder at 19 percent. Personal income is generally taxed at 15 percent.
Hungary “is not contemplating changes to the tax regime, as the current system based on proportionate burden-sharing – which supports legal jobs and recognizes the costs of raising children – is far better than any proposal by the IMF, OECD, or other international bodies,” he said.
