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On the other hand, the prime minister seemed committed to keep corporate tax at 16%, stressing that Hungary's corporate tax rate was the lowest in the region. If any moves are made in this area, they will be to strengthen SMEs, according to Gyurcsany.
The prime minister also said that employer contributions, which currently stand at HUF 33.5 for every HUF 100 - as opposed to 35 in the Czech Republic and Slovakia but only 20 in Poland - are under constant review, but gave no hint that personal income tax would be lowered, citing taxpayers' "insensitivity" to changes in the personal income tax burden.
"Hungary cannot and will not compete with Slovakia," Gyurcsany stressed, adding that Hungary does not want competitiveness based on low wages, because "that will create a poor country, not a competitive one."
According to a draft tax proposal obtained by the daily Nepszabadsag, the top VAT rate could be reduced to below 20%, to as low as 18%. The 15% preferential rate may also be cut, to its former level of 12% or even lower. The lowest, 5% rate will remain unchanged, as required by EU regulations.
