Personal income tax changes to cut budget revenue by HUF 300bn
Tuesday 15:37, October 19th, 2010
The government's proposed changes to the personal income tax from 2011 would cause a direct HUF 300 billion fall in budget revenue in 2011, György Kopits, head of the Fiscal Council, an independent body that assesses the budget, told a meeting of Parliament's audit and budget committee on Tuesday.
The drop is calculated with accrual-based accounting, Kopits said. Using cash flow-based accounting, the government proposal would reduce budget revenue by HUF 275 billion in 2011 and by HUF 500 billion in 2012, he said, speaking again of the direct effect.
The revenue would fall in large part because of the proposal to introduce a lower, 16% flat-rate tax on personal income from 2011. But bigger tax preferences for families alone would cut budget revenue by more than HUF 130 billion. Cutting the tax rate for other forms of personal income, such as interest, will cause budget revenue to fall a further HUF 65 billion-70 billion. (MTI-Econews)
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