BUDAPEST: Hungary could follow up its recent decision to slash the rate of corporate tax with a similar tax cut on individual income, Economy Minister Mihaly Varga has suggested.
In a recent interview with Hungarian business daily Vilaggazdasag, Varga said that Hungary should consider reducing personal income tax to a “single-digit” figure if economic conditions permit.
“In my opinion, as we’ve reduced the corporate tax to nine percent and brought the payroll tax down to the Central European average, it would make sense to cut the personal income tax,” Varga told the publication, adding that a “single-digit flat rate system is the goal.”
At present, personal income is generally taxed at a flat rate of 16 percent, while companies in Hungary are subject to corporate tax at 19 percent on annual income in excess of HUF500m (USD1.7m) and 10 percent on income up to this threshold.
Legislation approved by parliament on December 13 reduced corporate tax to a flat rate of nine percent effective from January 1, 2017.