tax credit, family tax credit, corporate tax credit, special tax;
Within the framework of the budget cuts, the government imposed a special tax of HUF 800-800 billion on various industries this year and next, while it also decided on a further tax increase of HUF 100 billion (excise tax, chip tax, company car tax).
According to research published so far, more than half of tax increases are automatically passed on to consumers by tax-forced firms, meaning that fiscal adjustments ultimately behave like a classic austerity. Nevertheless, in 2023, it will give up more than 1,800 billion forints in revenue in the form of tax benefits, according to next year’s draft budget. Even by temporarily cutting these tax breaks, the government would have placed a much smaller burden on the economy, as some of them flow through the economy “undigested”, with no social or economic benefits, but some groups have a reasonable extra income.
Tax breaks are part of the system of redistribution of state revenues, which is also a choice of values, as it turns out which areas the government considers important to support for some social policy reason: the most tangible tool of this policy is the family tax rebate. The purpose of this discount is to increase the income of families with children. True, the tax system is down sharply towards higher incomes, meaning that they can receive up to several times the average as a subsidy, and from there the ratio is even better when compared to those living below median income. Next year, taxpayers raising children will receive an additional HUF 52 billion from personal income taxes (PIT) and an additional HUF 52 billion through social security (social security) benefits. In other words, about 370 billion forints go to the family tax credit, which is about twenty percent of all redistributed tax benefits. The annual tax credit for under-25s is HUF 155 billion, and the total tax credit for women with 4 children is an additional HUF 32 billion. Although it is arguable that the social utility of all three tax benefits is arguable, it can be said that the state waives “only” 16 percent of projected PIT revenues.
The rate is much worse than corporate tax revenue (tao), where the same rate is 39 percent, while the government is collecting HUF 792 billion in corporate income tax as planned, while it will release 321 billion. (This ratio will change significantly this year and next, as in addition to the 800 billion corporate tax, the government will once again collect such a special tax.) At the same time, the government will continue to generously distribute corporate tax benefits: only HUF 127 billion will go to sports tao next year. , that is, mostly to support professional sports instead of the state treasury. Thus, since the start of sports tao benefits in 2011, the state has waived about HUF 1,290 billion in corporate tax revenue in favor of sports associations.
Within taoke discounts, sports still carry the most money, other taoke discounts cost HUF 178 billion, but this is spread over about ten purposes. For example, there is a tax rebate to support research and development or investment. But while these activities contribute to improving the efficiency of companies and the economy – so they are likely to pay off for the budget – the same cannot be said of sports tourism.
The government will also provide significant reductions in fees – here the annual loss of revenue is expected to be HUF 200 billion. The biggest item is the tax-free housing exchange, which used to act as a kind of property tax, but the government has been relinquishing this revenue for years. The tax-free housing for chocolates will cost an additional HUF 40 billion, but this loss will be offset by VAT on new homes and rising real estate prices. The death tax, ie the inheritance tax, has been abolished by the legislature for more than ten years, yet the resulting annual loss of revenue is still recorded – it will be HUF 43 billion next year.
The government waives a really large tax revenue through the social contribution tax, here companies do not have to pay HUF 345 billion. The soco discount comes from three major items: the HUF 180 billion subsidy for employment, which the government wants to use to encourage the employment of disadvantaged groups of workers. Another about 47 billion will be returned to companies to support vocational training activities, the economic benefits of which are also undeniable. On the other hand, the socio discount for pensioners will take away HUF 115 billion, which at first sight seems like a good idea, as it could in principle support the (further) employment of pensioners, but in the current labor shortage, the abolition of this discount is unlikely to reduce employment.
Source: Népszava by nepszava.hu.
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