One of the key principles of the new tax regime created since 2010 has been to reduce taxes on employee income, Minister for National Economy Mihály Varga said in an interview to political daily Magyar Idők. The new system leaves much more money at private persons and those must pay higher taxes who consume more, he stressed.

As the Minister noted, in the initial three years after its introduction, the new system had added some HUF 500bn annually to the budgets of households and families. In 2014, savings at households reached HUF 600bn and, in comparison to 2010, the amount of savings is expected to hit more than HUF 850 in the year 2016.

Allowances applicable by families with children account for one-third of the total amount of HUF 3600bn, Mihály Varga added.

With the current 15 percent personal income tax rate Hungary is among the top three countries with the lowest tax rates in Europe, he said, sharing rank two with Lithuania and coming behind number one Bulgaria.

(Ministry for National Economy)