Tallai: Left’s tax proposals could compromise utility cap scheme, family assistance

The proposals, if passed into law, could compromise the government’s programme of capping household utilities, maintaining the family support system and preserving the real value of pensions, Tallai said.

According to Tallai, the leftist parties would “hand out funds irresponsibly, missing the target, and it would destroy a well-functioning tax system which contains incentives for employment”.

Concerning the actual proposals, Tallai said one of them was aimed at scrapping tax refunds, which ran contrary to the government’s aim of “levying the lowest possible taxes on revenues gained through work”.

Referring to the proposal aimed at reducing the VAT on gas and electricity, Tallai said “VAT cuts are an extremely expensive and less effective tool of redistribution”, while the government seeks to protect families through the utility cap scheme and businesses through direct subsidies against “sanctions-generated energy price hikes”.

“We will protect the tax cuts and the family subsidies despite the current crisis caused by sanctions,” he said.

Referring to Eurostat figures, Tallai said Hungary had implemented the greatest tax cuts in the European Union last year. While in most countries the taxes went up, Hungary had reduced the tax burden to 34 percent of GDP, as against the EU average of nearly 42 percent, he said.