Hungary Orbán Pledges "Radical Simplification" Of The Tax Regime
- 20 May 2010 2:00 AM
"Poverty is the gravedigger of democracy," said Viktor Orbán, Hungary’s Prime Minister-elect on Wednesday, adding that he would include this statement in the government’s economic programme. He borrowed the quote from Sándor Demján, head of real estate developer giant TriGranit, who spoke before him at a conference in Budapest today. With regard to the incoming cabinet’s tax plans Orbán said they are thinking in a "radical simplification" of the system, while previously he repeatedly promised "radical tax reductions".
Orbán said there is a link between democracy and poverty, adding that if the rate of unemployment drops, democracy will strengthen.
Demján told the conference in the morning that Hungarians are waiting for a miracle to happen, referring to the overwhelming support for Fidesz in the April elections as opposed to the severe dislike harboured for the Socialist government. But there are no miracles, he said, as there is hard work behind every miracle.
Orbán said "miracle exists, it only disguises itself as hard work."
Demján remains on top of the ranking of Hungary’s richest people with a wealth of HUF 150 billion, according to local business daily Napi Gazdaság
Radical simplification in the tax regime
Orbán confirmed they would merge tax authority APEH and customs authority VPOP with an "intelligent solution". Capacities can be freed via the rationalisation of certain tax types, he said, adding that the merged organisation will be able to fulfil the tasks of its two predecessors after internal restructuring.
The new authority would bring under one roof the 15,000 APEH and 7,000 VPOP employees.
Orbán said the merger would not lead to staff expansion at the tax authority, bit it will resolve an "old issue" and so the new organisation will have more power.
With respect to Fidesz’s tax reduction plans the PM-designate said the tax system needs to be "simplified radically". "Simplifying the tax system to the extreme is more important than tax rates," he said.
Orbán pledged to reduce the administrative burden for businesses and families by HUF 800 bn (from the current HUF 2,800 bn).
It’s in Hungary’s interest to have banks established by local private individuals and allow these to progress. To this end the government "plans a strong capital grant for savings co-operatives," he added. These institutions will represent a backbone of the local financial system, he noted.
Orbán has once again criticized the central bank for allowing foreign currency-based lending become widespread. He reminded that when FX lending started to turn up sharply in the Czech Republic and Poland, the central banks of these countries intervened and thwarted this process, and now the high ratio of FX debts does not paralyze monetary policy there."
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