Prime Minister Orbán delivered a speech on a Tokyo business forum today. He told the audience about the new Hungarian 16 percent, flat rate, family-based income tax system which was introduced in 2011. He said he thinks income tax is a bad thing and ideally he would like to see a “zero percent” income tax. He expressed his hope Hungary could have a single digit income tax in a few years. He added 60 percents of the income tax was, and still is, paid by the top twenty percents of tax payers, so this is not what the change is about. What changed is that the previous tax regime penalized economic achievements, it demanded too much from those working legally and “it opened up the gate of tax evasion for large crowds of people”. He emphasized that the new Hungarian tax system aims to tax consumption instead of income.
Time will tell if this would work out and if it would become another step in the “Orbanization of Europe”.
BTW, here is an interview with Mr. Orbán broadcast by the Japanese public service TV where he stressed that Hungary must diversify her export markets and this is also a reason why Japan is considered an important economic partner for Hungary.
- Are Hungary’s Unorthodox Economic Policies working? (shaundacosta.wordpress.com)
- Viktor in Japan (politicsinhungary.wordpress.com)
- Orbanization of Europe and “the Hungarian disease” (politicsinhungary.wordpress.com)
- More signs of economic recovery (politicsinhungary.wordpress.com)