The Government has fulfilled a promise: the country has a Budget Act for 2016 at the beginning of the summer. Next year, everybody will make a step forward: the amount left in the economy – at employees, families and enterprises - will total HUF 230bn.
The 2016 Budget Act was adopted in accordance with EU legal guidelines and after the Budget Committee and the State Audit Office had formulated and submitted to the National Assembly evaluations and recommendations on the draft budget. Amendment proposals that were eventually endorsed out of the hundreds of recommendations provide extra funding for several fields without jeopardizing the ESA deficit target of 2 percent of GDP.
The early adoption of the Budget enables every economic stakeholder to get prepared for next year in time and project fiscal manoeuvring room. The lowering of the personal income tax rate from the current 16 percent to 15 percent will leave HUF 120bn at families – at more than four million people.
The increase of family tax allowances from HUF 10 000 to HUF 12 500 per month for families with two children, the cut in VAT on pork and the lowering of fees and duties will decrease fiscal revenues by about HUF 15bn, HUF 25bn and HUF 10bn, respectively. Measures such as the extension of free text books and free school meals for children are further steps designed to improve the situation of families.
Next year, the career models for armed forces and law enforcement employees as well as teachers will be continued and a new model for government officials will also be launched. More funds are allocated for healthcare and education purposes. The majority of EU funds will in 2016 be disbursed for economic development and job creation. The lowering of bank taxes by HUF 60bn aims to boost lending and thus facilitate the expansion of domestic enterprises.
Through the budget of tax cuts, the Government aims to bolster predictability and calculability, but also improve the country’s long term economic prospects, international competitiveness and the living standards of Hungarians.
(Ministry for National Economy)
