Consumer expectations about tax and employer contribution cuts

According to a representative survey conducted by TNS Hoffmann in December 2016, 59 percent of Hungary’s population heard about the tax and social contribution cuts the government had announced. 68 percent of respondents don’t count on significant changes because of lower taxes and employer contributions, but one quarter of them expect positive changes, while 3 percent think they will have a negative effect. From those who reckon that the decrease in taxes and social contribution will be beneficial, 60 percent hope for higher salaries and 51 percent calculate with a better quality of life for their family.

Those who think the cuts will have a negative influence said the decrease won’t affect salaries positively. If the reduction in taxes and employer contributions will result in an increase in net wages, it is likely that sales of FMCG products will increase and people will put aside more money: 40 percent of respondents said that they would spend more on FMCG products and more than one third would start saving money or save more than they do now. Typically it is better educated and wealthier consumers who would increase their savings and those representing the lower layers of society would buy more FMCG products. In the case of a net wage increase, in most product categories people would turn to higher quality products/services instead of buying more.

Food, clothes and health preservation are those categories where the highest proportion of consumers would purchase high quality products if they earned more. It is also important to see which are those categories where new consumers would appear: 18 percent said that they don’t spend on travelling now but they would if their salary increased; 17 percent would start spending on preserving their health. TNS Hoffmann’s Omnibus survey represents the Hungarian population in the 18-64 age group. 1,000 people were asked questions personally (TAPI), who were selected in several stages.