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18th February, 2020

Parragh supports lower turnover tax

Reducing the local business tax could save companies Ft 80-100 billion and attract more multinational companies to Hungary, Chamber of Commerce and Industry president László Parragh told Magyar Nemzet.

There is a huge need for tax cuts, as more and more companies are deciding to relocate production from China to Hungary, he said.

He also argued that the tax leaves Hungary at a competitive disadvantage in the region.

The local business tax, 2% of turnover, generated Ft 830 billion in revenue in 2019, up from Ft 520 billion in 2016.

Parragh shrugged off concerns that reducing the local business tax, a major source of revenue for local governments, would endanger their operation.

He said the shortfall could be recouped by new investments and developments of emerging companies.

Earlier this month, the National Competitiveness Council, of which Parragh is a member, recommended that the government change the local business tax scheme.

Finance Minister Mihály Varga met with the mayors of large cities last week, and said the aim is to find a solution that is manageable for everyone.

Sources regularly consulted, with abbreviations used in text: Népszabadság (N); Magyar Hírlap (MH); Világgazdaság (VG); Napi Gazdaság (NG); Magyar Nemzet (MN); Népszava (Nsz); Kossuth Rádió news (KR); nightly TV news (TV).

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