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Government to continue phasing out sectoral taxes

The government will continue to gradually phase out special taxes on some sectors of the economy, the finance ministry said prior to submitting a bill on tax changes for next year to lawmakers on Tuesday.

The suspension of the advertising tax would be extended for another year, while the utilities tax would be phased out in part in 2024 and in full from 2025, according to the bill, the ministry said.

Rules on personal income tax and contributions would be simplified, and amendments would pave the way for the broad adoption of electronic receipts. Taxation of sole proprietors would be “significantly streamlined” from 2025, it added.

The ministry said the European Union directive on the global minimum corporate tax would be transposed into national legislation in a separate bill. The rules, which would apply only to companies with annual turnover of more than 750 million euros, would allow for investment preferences and take into account other taxes paid in Hungary. The new rules would support Hungarian businesses’ competitiveness “to the greatest possible degree”, the ministry added.

The government is holding to the principle, adopted in 2010, of improving tax collection rather than raising taxes, the ministry said. The personal income tax rate — among the lowest in Europe, will remain in place, as well family tax preferences, preferences for newly married couples, preferences for families with four or more children and PIT exemptions for mothers under 30 and all Hungarians under the age of 25, it added.

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