Szijjarto: Hungary rejects plans to introduce global minimum tax

“It has become clear over the past decade that raising taxes is a dead-end-street,” Szijjarto said, adding that “the most effective incentives for creating jobs and triggering economic growth are tax cuts”.

“Nobody has the right to intervene from abroad in Hungary’s tax policies,” Szijjarto said, insisting that defining tax brackets should remain Hungary’s sovereign right.

At the same time, he supported initiatives aimed at settling the issue of how tech giants should be taxed, arguing that these companies ought to pay taxes where they operate.

Szijjarto said it was also clear that Hungary had introduced the most successful economic response measures against the crisis caused by the pandemic, adding that it was beyond doubt that the correct economic policy was focused on tax cuts, supporting investments and saving jobs.

“All over the world, we’re seeing the pursuit of policies that are making it harder to reboot the global economy, such as the ones in favour of introducing a global minimum tax,” the minister said.

He said the concept of a global minimum tax went against the principles of the market economy and was designed to benefit countries that had not had the fiscal discipline needed to introduce low tax rates.

Szijjarto said one of the keys to Hungary’s competitiveness was that it the lowest payroll and corporate tax rates in Europe. Fiscal discipline was an important prerequisite for this, he said, adding that countries that had been less disciplined had been unable to cut taxes.

Hungary continues to favour “work over welfare”, he said, adding that the government intended to continue cutting taxes. “We won’t accept any form of international pressure or regulation that would lead to tax increases in Hungary,” he said.

At the same time, Szijjarto said it was important to find a solution regarding the taxation of tech giants, adding that they should pay their taxes in the countries they operate in.

“We shouldn’t allow tech giants to enjoy an unfair competitive advantage in the absence of international tax regulation!” he said, attributing to the OECD a key role in settling the matter in a satisfactory manner.

Szijjarto said Mathias Cormann applied a “pragmatic and sensible approach” to the matter and did not allow ideological debates to influence economic policy matters.

Szijjarto was the first official Cormann received since his election as the next OECD chief.