At a press conference in Budapest, Parliamentary State Secretary at the Cabinet of the Prime Minister Csaba Dömötör said that the Government’s reforms are working: in 2016 the personal income tax rate will be lowered, wages will increase and the benefit system for family housing will be restructured.
The State Secretary announced that 2016 will be the year of tax cuts: as of 1 January, the personal income tax rate will be lowered to 15 per cent, and VAT rates on pork and on housing construction will be cut from 27 to 5 per cent.
The tax benefit per child for families with two children will be increased from HUF 10,000 to 12,500. Thus the annual income of families can increase by HUF 60,000, Mr. Dömötör explained. He added that family taxation has yielded the expected results: according to government estimates, reforms between 2011 and 2016 resulted in approximately HUF 1,300 billion remaining in the hands of families.
The Parliamentary State Secretary also announced that issuance of student ID cards, driver’s licences, address registration cards and individual entrepreneur ID cards will be made free of charge.
He also said that the minimum wage will be raised to HUF 111,000 gross, while the guaranteed minimum wage will reach HUF 129,000. This is a 5.6 per cent increase in the minimum wage – the highest rise for 13 years.
The wages of employees in the public sector will also be raised: following last year’s 30 per cent increase, the wages of members of the armed forces and police will be increased by 5 per cent, while the wages of those working in higher education will increase by 15 per cent.
Furthermore, 43,000 nurses and 18,000 doctors will receive pay rises: the minimum wage for medical specialists will increase to HUF 270,000 net, Mr. Dömötör explained.
Minister of State for Government Communication Bence Tuzson added that, as part of the family housing programme, families with one child will receive HUF 600,000, those with two children HUF 2.6 million, and families with three children will receive HUF 10 million. In the latter case, families will also be entitled to a loan facility of 25 years maturity and an interest rate of no more than 3 per cent.
The requirement for this facility is the lack of a criminal record, and that the parents are officially married. Single parents are also entitled to the benefit, however. Mr. Tuzson added that families who already have three children may also apply for the benefit, but subject to a deduction equal to the amount of similar support previously received.
(Cabinet Office of the Prime Minister)
