The Hungarian government recently presented the tax laws for the next year; these and the proposals already passed clearly show how the government wants to develop the tax system. “The employer tax will be reduced again while the income-tax exemption will be introduced for employees under 25 years of age. These two measures alone will keep 300 billion HUF in people’s pockets and in the Hungarian economy. The tax reduction policy will thus continue” said András Tállai to Magyar Nemzet. The Deputy Minister also added: while the Hungarian government is trying to restart the economy by lifting the load on people, one of the most significant international initiatives is supporting the contrary with a global minimum corporate tax. The idea has very strong support from US President Joe Biden. But what is the global corporate tax?
The basic idea behind the rule was to create a framework for uniform taxation of big tech giants. But today it has become more about introducing a minimum corporate tax rate. Recently elected US President Joe Biden mentioned not long ago that the minimum global corporate tax rate should be 21 percent. Such a system is already under construction by the Organization for Economic Co-operation and Development. The OECD has been working on the details for a longer time now.
“Hungary will not contribute to the introduction of any tax raises. Simply put, we are unable to support any kind of tax increase, even if the idea is backed by especially powerful supporters” stated the deputy minister and added: there are no ideological or personal sentiments behind the government’s approach. András Tállai explained that Hungary has made major efforts to balance its budget within the past few years. These efforts were effective and resulted in – before the pandemic and consequential global crisis – outstanding growth in our country, the creation of many jobs, higher wages and increasing numbers of foreign investors choosing Hungary. “Tax policy played a key role in these results; exercising our economic sovereignty, we reduced taxes to historically low rates, and for some time now Hungary has had the lowest corporate tax rate in the entire European Union. The decision-making process of several investors considering Hungary was positively influenced by our low tax rate,” the Deputy Minister said. He then continued: “Hungary will not give up one of the most important elements of its economic sovereignty: the right to tax.”
