Mihály Varga at the AmCham business forum – Photo: MTI

Finance Minister: Global minimum tax would bring about tax increases

US advocacy group welcomes Hungary rejecting global minimum tax

Hungary is wise to reject the global minimum tax proposal that would significantly damage the valuable tax competition among countries and would cause undue harm to businesses, workers, and economies around the world, Grover Norquist, President of Americans for Tax Reform, said on the conservative advocacy group's website.
17. June 2022 17:04

Norquist said a global minimum tax would greatly curtail the force of tax competition. He added that competition between nations offered a critical check on the power of governments and it was vital for ensuring efficient and reasonable levels of taxation.

“The proposed minimum tax rate would be particularly detrimental to countries such as Ireland, Bulgaria, and Hungary that currently keep their corporate tax rates at lower, more competitive rates,” he said.

“A global minimum tax also threatens poorer, developing countries that need to maintain high growth rates in order to be lifted out of poverty. Cutting corporate tax rates leads to an increase in investment, productivity, economic growth, output, and ultimately higher standards of living,” he added.

Norquist said the global tax agreement was very dangerous, as it increased the tax burden on US and European manufacturers at a time of war and significant challenges to western economies.

Finance Minister: Global minimum tax would bring about tax increases

As the introduction of the global minimum tax would bring about tax increases, hinder competitiveness and lead to a loss of jobs, the Hungarian government will resist the growing international pressure and reject the related directive, Finance Minister Mihaly Varga said after an Ecofin meeting in Luxembourg on Friday.

Varga told Hungarian journalists that the EU was preparing to introduce a tax burden that would slow down and impair the growth of the EU countries’ economies while other countries held the position of wait-and-see and are not planning to introduce such a tax.

“Hungary’s position is that such a measure should not be introduced now when energy prices are soaring, the burdens of families are increasing and companies are facing increasing challenges,” Varga said.

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