Therefore the government needs to convince Brussels of the inevitability of the new use of the funds for developments, he added.

There is no other source for economic development but EU funds, as households and companies are seriously indebted, he said.

The MKIK still sees the reduction of taxes on labour and social security contributions as a prerequisite for economic growth and a way out of the crisis, but understands that the cabinet has limited room to manoeuvre.

In the budget, tax revenue targets were overestimated: the proceeds from car registration tax, corporate tax and excise tax will all come below target, Parragh commented.

On next year's fiscal plans to tax the minimum wage, Parragh said the MKIK has always been against a total tax exemption, but now sees that this measure must be carried out thoughtfully because it could have an impact on hundreds of thousand of people.

Tensions could rise if people in depressed regions lose their jobs as a result of the tax hike, Parragh added."

Source: Hungary Around the Clock.

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