Next year’s tax package leaves on average HUF 80-85 000 per year at families with two children, Minister for National Economy Mihály Varga said, after the Hungarian parliament adopted the tax package that accompanies the 2017 Budget.
The Minister said that about one-third of tax reductions stemmed from lowering VAT on certain products and services, while two-thirds came from the increasing of allowances for families with children. In 2017, VAT on poultry, eggs and fresh milk will be cut to 5 percent, while that on internet and restaurant services will be reduced to 18 percent. As a result of these measures, some HUF 55bn more is expected to be left at households.
Employers will be exempted from paying tax on contribution to kindergarten charges, one of available fringe benefits. This will leave HUF 1bn more at families with children. This practically means that in case an employee presents a bill for nursery or kindergarten services issued on behalf of the employer, neither the employee nor the employer are to pay any tax on the refunded amount, the Minister said.
Through the package of measures aimed at stimulating labour force mobility, enterprises and employees are set to gain HUF 9bn. Small enterprises are going to benefit from a business-friendly tax package next year, he pointed out. Thanks to the new, simplified fringe benefit scheme (“cafeteria”), in 2017 more than 4 million employees may receive HUF 100 000 per year in cash. Besides that amount, HUF 100 000 and HUF 350 000 per year may be transferred to the SZÉP vouchers of public sector and private sector employees, respectively.
As one of major measures aimed at combating the black economy, Mihály Varga underlined the “Hungarian Google-tax”, a kind of advertisement levy. This amendment ensures that global companies with advertisement operations shoulder some of public burdens in Hungary.
(Ministry for National Economy)
