Local business tax, social insurance contribution, corporation tax - are in the focus of coordination talks of social partners in regard to legal rules of next year. The Government agrees with the priorities set.
Starting point of the Finance Minister and his staff is, that tax reduction must be compensated with savings on the expenditure side and they see chances of actions in the field of social insurance contributions and eventually business tax.
Doubtful is yet, if in 2005 corporation tax can again be reduced by 2 percentage points. Employers' associations and chambers are pushing foremost the solution of the business tax problem. Highlight of a joint declaration by MKIK and VOSZ in February was straightforwardly the demand of abolishing the local business tax. A similar line was followed by Péter Fáth (AmCham) and Róbert Heinczinger (Joint Venture Association) in an interview for Világgazdaság: taxes based on gross revenue (instead of profits) may shock and refrain investors. Róbert Heinczinger: dubious is in addition, if the business tax is EU-conform at all, and believes, that it could be replaced by a profit- or property tax. According to Heinczinger and Fáth the introduction of a real estate tax should also be checked as an alternative.
Coordinating talks concerning taxes continue, committees are being set up.
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