The three most important pillars of Hungary’s taxation regime will continue to remain the promotion of families, low taxation for small and medium-sized businesses, and the maintenance of taxes levied on specific sectors.

This fiscal system has already proven its worth; it is able to provide financial stability, social security and economic growth for Hungary. The principle that the Government seeks to reduce taxes on work and employment in the interest of boosting economic growth is therefore upheld unchanged.

The Government is shifting the focus of taxation from taxes on incomes towards consumption and sales-type taxes as well as taxes that serve environmental and health preservation purposes. The taxes levied on specific sectors will continue to remain in force also in 2015.

The Government will further increase the support it provides for families. If a couple decide to get married and to have children later, they may firmly rely on the support of the State.

The tax benefit of couples marrying for the first time will represent savings in the magnitude of HUF 1 billion for some forty thousand couples next year. This amount will triple in 2016. This new benefit is, in fact, a fiscal preliminary or supplement to the benefits provided for children.

The payment and collection of taxes – as the most significant revenue item of the budget – is essential for the survival of the country, the functioning of the State, the fulfilment of public duties and the financing of welfare expenditures. The protection and enhancement of tax revenues is not only in the best interest of the Government but is also a fundamental interest of the entire nation. It is therefore important that the Government should, also in the future, continue to reduce tax fraud and to use all possible means in the fight against tax evasion.

Therefore, the tax package approved today contains a number of measures of this nature. From among these, the most significant one is – that is also exemplary by European standards – the system set up to prevent VAT fraud. The purpose of the Electronic Road Freight Traffic Monitoring System is to keep track of the actual route of goods and to ensure that no goods may be placed on the market in Hungary which were not previously reported to the tax authority. The new system will allow the authorities to perform their controlling and monitoring functions more effectively than ever before.

From among the proposed amendments, the changes in the rules concerning fringe benefits concern the most people. In Hungary, there is a 16% tax on wages and salaries; we have one of the lowest income tax rates in Europe. The Government proposed changes in the taxes payable on fringe benefits due to the ever decreasing taxes on incomes. The upper limit of fringe benefits will decrease to HUF 450,000 next year, and the part in excess of HUF 200,000 may only be transferred to Szép Cards, the balance of which may be used for leisure-time activities, catering and hotel services.

(Ministry for National Economy)