Finance Minister Mihaly Varga – Photo: MTI

Hungarian interests asserted in talks on global minimum corporate tax, finance minister says

Varga puts 2022 GDP growth at 5.5-6 percent

Finance Minister Mihaly Varga said next year's GDP growth could reach 5.5-6 percent at a business forum organised by the American Chamber of Commerce (AmCham) on Friday.

The 2022 budget, approved by lawmakers in June, was drafted assuming a GDP growth of 5.2 percent next year.

Varga reiterated that 2021 GDP growth is expected to reach 7-7.5 percent.

Hungary’s economic output has returned to 2019 levels, which is an “excellent result”, considering that the tourism industry, which accounts for 8-10 percent of GDP, has still not fully recovered, he said.

Varga counted higher energy prices, a pickup in inflation, a worsening pandemic and a shortage of raw materials among the downside risks to the economic outlook.

He said monetary policy tightening is “appropriate” in light of inflation data, but warned against making the same mistake as after the 2008-2009 crisis, when supportive monetary and fiscal policy “were rolled back too quickly”.

Hungarian interests asserted in talks on global minimum corporate tax

Hungary has succeeded in pushing through its interests at the international talks on the global minimum corporate tax, Varga said.

The corporate tax in Hungary will remain 9 percent, Varga said in a Facebook post. The global tax will be collected using “a targeted solution” that takes into consideration genuine economic activity, he said. “That means that corporate assets and payroll costs will be deductible using a special method of calculation, so those companies that are conducting activities with genuine, not fictitious, assets and payroll costs, can avail of a preference,” he explained.

Hungary also successfully negotiated a ten-year transition period, the minister added.

“We have achieved serious results, we can easily call this a Hungarian success — we have been right to stand up for our interests,” Varga said.

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