Govt To Cut Payroll Tax 2.5 Pps Next Year
- 22 Sep 2017 8:48 AM
Hungary’s government plans to cut the payroll tax by 2.5 percentage points next year rather than by 2pps in reaction to fast wage growth, Economy Minister Mihály Varga said. Varga noted that the government had agreed with employers and unions late last year to reduce the payroll tax by a further 2 percentage points in 2018 but would widen the cut to 2.5 percentage points if gross wage growth exceeded 11% in January- September.
Gross wages were up an annual 12.6% in July, data released by the Central Statistical Office (KSH) on Wednesday show. KSH will not publish January-September wage data until Nov. 22, but the National Bank of Hungary projected the rate for the period would exceed 11% in a quarterly forecast.
The government already cut the payroll tax by 5 percentage points from 27% from the start of this year under the agreement reached with employers and unions. The payroll tax reductions are being paired with big increases in the minimum wage for skilled and unskilled workers.
Varga made the announcement after a meeting of the National Competitiveness Council, a body of business leaders and experts established to make recommendations to the government.
Republished with permission of Hungary Matters, MTI’s daily newsletter.
MTI photo: Kovács Tamás
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