 Small
conservative opposition party the Hungarian Democratic Forum (MDF) last
Thursday said it would attempt to force the introduction of a flat tax after a
coalition split raised the prospect of a minority government.
All parties
in opposition have previously stated they supported implementing a flat tax  Small
conservative opposition party the Hungarian Democratic Forum (MDF) last
Thursday said it would attempt to force the introduction of a flat tax after a
coalition split raised the prospect of a minority government.
"The
withdrawal of the [junior coalition] Alliance of Free Democrats has opened up
the possibility of introducing a flat tax from 2009, since this gives the
parliamentary majority for the decision," the party said in a statement.
MDF leader
Ibolya Dávid called for opposition parties to attend talks on 15 April to work
out details of a bill to submit to parliament by May. The party wants to
emulate regional peers such as Slovakia
and Romania
by introducing a flat 18% personal income tax to reduce a tax burden it called
"unfairly high".
The Free
Democrats (SZDSZ) and main opposition party Fidesz - along with its ally the
Christian Democrats (KDNP) - have said in the past that they would favour a
flat tax. Both Fidesz and the KDNP, in response to the request, said their main
concern was reducing the tax burden on families. They did not say whether they
would attend the meeting. MSZP spokesman István Nyakó welcomed the proposal, saying
that it was good to finally "talk about policies in the political
dialogue" and said his party was ready to debate the issue.
The SZDSZ
said in response that a flat tax was part of its economic policy, but added
that the MSZP should be involved in the talks as well. "The SZDSZ will
take part in any such talks that address revamping the tax system. This,
however, has to happen in five-party, not four-party, talks," the party
said in a statement.
While the
SZDSZ was in the coalition, it deferred to the senior Hungarian Socialist
Party's (MSZP) stance that a flat tax could not be introduced while economic
reforms aimed at cutting the budget deficit and adopting the euro were in
progress.
The MSZP
has only 190 seats in the 386-seat parliament, meaning that the opposition
parties could force through a flat tax bill by banding together.
Hungary is ranked as having the
second-highest tax burden for single people, behind Belgium, amongst the members of the
Organisation for Economic Cooperation and Development (OECD). Many feel the
high burden - made worse in 2006 when the government hiked taxes as part of its
economic reforms - damages Hungary's regional competitiveness.
Hungary's tax wedge - the difference
between labour costs to the employer and the net take-home pay of the employee
minus any tax credits - was 54.3% in 2007, according to the OECD. This compares
to 42.87% in the Czech Republic, 42.81% in Poland
and 38.52% in Slovakia.
The tax burden is also credited with maintaining the huge black economy. Estimates
of the size of the black economy vary from the official figure of 18% of GDP to
as high as 50% among some analysts.
 Add as favourites (102) | Views: 2196
Only registered users can write comments.
Please login or register. Powered by AkoComment Tweaked Special Edition v.1.4.6
AkoComment © Copyright 2004 by Arthur Konze - www.mamboportal.com
All right reserved |
