Magazine: Budget approved in the spirit of stability and predictability

The Hungarian parliament has given the green light to the 2016 budget, the main objectives of which are the protection of jobs, tax reduction and creating a stable and predictable economic environment. 119 MPs voted yes from the ruling party and all 63 no votes came from the opposition. Minister of National Economy Mihály Varga told at a press conference that the government calculates with a 2.5-percent economic growth, a 2-percent budget deficit and a 1.6-percent inflation rate. The government thinks state debt will drop to 74 percent of the gross domestic product. The minister added that the goal with the early budget was making Hungary’s economic policy stable and predictable. For the 2016 budget the government calculated with HUF 15,800 billion 364.6 million in revenues and HUF 16,561 billion 999.1 million in expenditures – the deficit is HUF 761 billion 634.5 million. The biggest source of the revenues is going to be personal income taxes (as of 2016 the tax rate is reduced from 16 to 15 percent) as HUF 1,658.4 billion is earmarked in this category; this is followed by VAT contributions at HUF 351.850 billion. Corporate taxes will bring HUF 400.5 billion for the budget, 59 billion more than in 2015. This year financial institutions will have to pay HUF 144.2 billion in taxes – next year this will drop to HUF 79.2 billion. The government hopes this step will give a boost to banks’ lending activity. From the advertising tax HUF 10.9 billion is expected for the budget (this year HUF 6.6 billion came in).