(Reuters)
Hungary will launch a package of tax cuts for small businesses worth up to 90 billion forints ($272 million), to be financed with a tax rise on banks ahead of next year’s national election, Prime Minister Viktor Orban said on Monday.
Faced with a third year of stagnation, Orban’s government has announced large-scale tax cuts for families, wage hikes, food vouchers for pensioners and other measures to shore up support.
Last week his cabinet raised its budget deficit targets to 5% for this year and next, while doubling a levy on banks to 360 billion forints, with higher spending ahead of the ballot upending deficit reduction plans.
“We probably need to find a sensible balance,” Orban told a press conference. “For us, jobs are important and jobs are mainly found in production and services facilities, therefore, they have a priority.”
Orban said the measures would include postponing an excise tax hike on fuel by six months at a cost of 20 billion forints, providing tax benefits to energy companies to modernise infrastructure and cutting taxes for small businesses.
The government will also widen eligibility for a small business tax to include up to 5,000 more companies and raise the brackets of a retail sector tax, while keeping tax rates unchanged, affecting 3,500 businesses, Orban said.