In recent years, the Orbán government has made people's lives easier with significant tax cuts. The results of the elections allow the successful economic policy to continue.
As a result of the parliamentary elections, the economic policy that the Orbán government started in 2010 will not be interrupted. The basic premise of this is that catching up with more developed states can be strengthened not by austerity, but by stimulating the economy and expanding employment. This has been accompanied by significant tax reductions in recent years.
In the latter area, Hungary achieved a podium place in the European Union.
Our country is in first place when it comes to reducing taxes on wages.
The tax value of the average wage decreased by almost 12 percentage points until 2022 compared to 2009. The employer's tax rate was 33.5 percent in 2009, now it is 13 percent.
A huge change has also taken place in the case of other public charges. The top rate of personal income tax (PIT) was 36 percent in 2009, which changed to 15 percent, while employees under the age of 25 and mothers with four or more children do not have to pay anything, because the tax rate is zero percent. In 2009, the state deducted 49.5 percent from the wages of retired workers, but now only 15 percent.
The competition for investments is huge all over the world, as well as in our immediate area.
Hungary is in a very good position in this area as well, because the corporate tax is only nine percent, while in 2009 it was twenty percent.
In addition to all of this, favorable decisions were also made which, among other things, abolished the administration fee, as well as the inheritance and administration fee for direct relatives and spouses. Together with the tax cuts, these are all measures that people will feel in their wallets, because the government will take less money out of their wages. This contributed significantly to the strengthening of Hungary's internal market.
According to analysts, the full recovery of the labor market and the increase in consumption due to wage increases and subsidies can be one of the engines of economic growth.
This is why consumption can increase, people spend more in stores, and can spend more on using various services. This practice is completely opposite to the period before 2010, because under the left-liberal governments, a series of tax increases made everyday life difficult. One of the stakes of the recent elections was whether the world characterized by economic collapse would return, or whether development would continue.
Lower tax burdens do not bleed the state either, because money from people flows back into the bloodstream of the economy. This also increases the revenues of the budget.
In other words, the assumption that if more people work, public burdens can be reduced without risk has been proven. This is confirmed by the data which show that the level of tax evasion has decreased to a very large extent.
Finance Minister Mihály Varga said this earlier:
"In the last ten years, tax evasion in Hungary has been reduced by a quarter. While the rate of VAT evasion was 22.3 percent in 2010, it changed to 6.1 percent by 2020, which is twice as favorable as the regional average.
This means that thanks to tax reductions and economic whitening measures, tax morale has improved, and the number of fraudulent companies has significantly decreased. The biggest winners of this are businesses that operate fairly."
In 2014, the government made the operation of online cash registers mandatory, and in 2015, it also introduced the electronic road traffic control system. Both have successfully integrated into the system of the Hungarian economy.
Source: Hungarian Nation
Featured image: pénezcentrum.hu
