Finance Minister Mihaly Varga – Photo: Facebook

Finance Minister: Hungary at EU forefront of economic whitening

Hungary is among the European Union countries that have made the most progress in whitening their economy since 2010, the finance minister told a conference on Wednesday, noting that the VAT gap has fallen to 4.4 percent from 22 percent and the rate of tax deductions as a percentage of GDP has decreased to 35 percent from 40 percent.

Hungary’s government overhauled the tax system in 2010, shifting the emphasis from taxes on labour to consumption taxes, Mihaly Varga said on the opening day of the General Assembly of the Intra-European Organisation of Tax Administrations (IOTA) in Budapest.

The highest personal income tax rate has fallen to 15 percent from 36 percent since 2010, while the corporate tax rate has been cut from 20 percent to 9 percent, the lowest in the EU, Varga said. Meanwhile, payroll taxes have been slashed from 33.5 percent to 13 percent, he added.

It was thanks to these measures, Varga said, that Hungary ranks 11th out of the 38 OECD countries.

The presidency of the IOTA in the year-long cycle ending on July 1, 2024 was held by Ferenc Vagujhelyi, head of national tax and customs authority NAV.

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