Hungarian Audit Office Head Suggests Scrapping Personal Income Tax

  • 12 Aug 2021 12:46 PM
  • Hungary Matters
Hungarian Audit Office Head Suggests Scrapping Personal Income Tax
The head of the State Audit Office, in an article published by the daily Magyar Nemzet, said ideally personal income tax should be scrapped altogether, arguing that it was a burden on work and generally perceived as a "punishment".

On the other hand, national insurance covering the cost of pensions, health care and other benefits is seen as a down-payment on personal security rather than a burden, László Domokos wrote.

Domokos said the key to economic success was employment policy which, he argued, should enliven the labour market by tearing down barriers put in the way by the state. So taxes should be curbed as far as possible, he added.

The government has started this process, he said, noting measures such as exempting mothers who raise four or more children from paying personal income tax and pensioners who choose to return to work from payroll taxes, while young earners won’t have to pay income tax up to the level of the national average wage.

Also, contributions paid by businesses have been slashed,Domokos noted.

Even with targeted tax forgiveness, given successive large wage hikes, the state has received more revenue from personal income tax, while because the black economy has drastically shrunk, revenues are now at a higher level more generally, he noted.

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