PM Orban: Eleven Measures in Support of Small Businesses + Video

PM Orban announced good news.

Prime Minister Viktor Orban (Source: Facebook)

Viktor Orban held a press conference on Monday with Elek Nagy, President of the Hungarian Chamber of Commerce and Industry, where they announced a package of measures affecting small and medium-sized enterprises.

"We are in a state of mourning, this is not easy, after the nation has taken both a lung shot and a heart attack, but no one can make a living by lamenting. We have reached an agreement," Prime Minister Viktor Orban began, referring to Sunday's Hungary–Ireland World Cup qualifier, which the Hungarian team lost. He continued by saying that the government is struggling with a difficult dilemma, one that poses an ever-greater challenge as Europe marches toward a state of war.

Brussels Is Preparing a War Plan

According to the Prime Minister, all this can be perceived even by those who are not sitting at the negotiating table but only follow the news. "You can see that we are facing harsh, war rhetoric. In European politics, we now hear expressions as severe as war economy or that by 2030 we must be ready for war. Economic policy is suffering serious consequences as a result. At this moment, the situation is that Brussels is openly drawing up a war plan, with documents being adopted and declarations being issued," he said.

 Viktor Orban and Elek Nagy at their joint press conference announcing measures to support SMEs (Photo: Arpad Kurucz)

"They maintain an army of one million, directing 20–25 percent of the budget toward it, and this carries severe consequences," he pointed out, emphasizing that the real question is whether we accept being drawn into a war policy, fit ourselves into that framework and try to make the most of it, or refuse. "We must ask whether to accept this direction or not, and whether to draw up a national policy or not."

 PM Orban stated that

Hungary is capable of pursuing a national economic policy.

On tax policy, he noted that it remains possible to continue Hungary’s own economic policy, even if the country cannot completely detach itself from the war economy. "No one questions that it has a negative impact on the country, but we must stick to our own non-war national economic policy. We must not give up on our goals.

Reducing Burdens, Cutting Red Tape

"For Hungarian entrepreneurs, this means we will reduce their tax burdens and cut back on bureaucracy, as outlined in eleven points," he said.

He recalled that the government had already announced the fixed 3 percent interest rate loan program, and now, at the chamber’s request, they have concluded a further  tax reduction agreement worth 80–90 billion forints.

1. Introducing a phased threshold for VAT exemption
2. Increasing the general expense ratio for flat-rate taxpayers
3. Reducing the social contribution base for full-time sole proprietors, lowering the tax burden for 140,000 entrepreneurs
4. Expanding eligibility for the small business tax (KIVA), allowing 4,000–5,000 additional businesses to enter this favorable scheme
5. Providing 100 million forints in tax relief to support environmental damage restoration and green investments
6. Granting tax incentives to Hungarian energy providers for infrastructure upgrading
7. Raising retail tax brackets, offering more favorable taxation for 350,000 businesses
8. Postponing the increase of excise tax on fuels by six months, and if justified, postponing it further
9. Raising the corporate tax advance threshold from 5 million to 20 million forints
10. Increasing the value limit for simplified reporting by microenterprises from 150 million to 180 million forints
11. Introducing special administrative relief for 80,000 sole proprietors

We are looking for every opportunity to support productive activity as much as possible through tax incentives. I see another view emerging, one that wants to cut the bank tax and compensate for it by giving fewer benefits to businesses. For us, what matters is preserving jobs,

Viktor Orban stated.

The Prime Minister concluded by saying that more such agreements will follow, that this was a different kind of Chamber, and that it was important for them in the management of economic policy. "It is in our interest for the Chamber to participate  in both negotiations and decision-making," he emphasized.

The Renewed Chamber Is Moving in the Same Direction as the Government

Elek Nagy, President of the Hungarian Chamber of Commerce and Industry (MKIK), said that the measures announced today were preceded by substantial joint work. "Just as an airplane has two pilots—one steering, one navigating—and the two cooperate toward a shared goal, the government and the chamber are sitting in the same aircraft, moving in the same direction," he said.

"It has been a year since the national Chamber was renewed, and the new leadership set the goal of cooperating with entrepreneurs and understanding their problems. Our task is to learn about these problems, analyze them, and then work with the government to propose solutions.  It is no coincidence that we have concluded an eight-page, five-year, long-term agreement with the government, complete with tasks and goals. We have established a joint working method, thinking together in the interests of the Hungarian economy," Elek Nagy explained.

Taxes and complicated administration hurt small businesses the most, Elek Nagy says (Photo: Arpad Kurucz)

He stated that targeted support must be provided to help entrepreneurs access loans, and interest subsidies serve exactly this purpose.

Our task is to protect the general interests of the economy. This is how we worked on the current package, starting from what hurts small businesses the most. This was taxation and complicated administration,

he said, adding that this package totals 100 billion forints, so much money will remain in the pockets of small entrepreneurs.

"We considered it essential that the package should move toward greater legal certainty, and that the upper threshold for VAT exemption should be set not only for one year but for three. The same principle applies to costs for flat-rate taxpayers: after lengthy debate, the government accepted raising the deductible to 50 percent. This means that out of 100 forints, a business must pay 60 today, 55 next year, and only 50 thereafter. This is a substantial saving, which is good for the entrepreneurs and the Hungarian economy alike," Elek Nagy stressed.

Life to Become Easier for Hundreds of Thousands of Entrepreneurs

He noted that the combined effect of the excise tax and retail tax measures amounts to 50 billion forints that will remain in entrepreneurs’ pockets, helping push the Hungarian economy forward despite the difficult circumstances.

He said that the agreement to reduce administration is at least as important, with entrepreneurs required to file tax returns only quarterly. He added that microenterprises will enter the small-business category at higher revenue levels, easing the burden for ten thousand businesses.

What is closest to my heart is that just as the tax authority completes personal income tax returns for citizens, it will complete tax returns for sole proprietors, who will only have to check them. We agreed that the tax authority will implement this within the next three years, affecting 600,000 sole proprietors,

Elek Nagy announced.

Looking ahead, he said that Hungary needs a knowledge-based economy, and a knowledge-based Chamber can support that goal. The government and the Chamber are already working together on the vocational training and adult education systems, and issues related to artificial intelligence will also receive prominent attention in the period ahead.

Cover photo: Prime Minister Viktor Orban (Source: Facebook)

További játékainkhoz kattintson ide!