Businesses are suffering from the regular changes to tax laws, says Tamás Mlinarik, a senior manager at KPMG, who believes uncertainty is the biggest issue for businesses, writes Napi.hu. With the constant changes to tax law, companies are unable to make short-term forecasts of their performance, and are therefore unable to do business as confidently as they would like, he argues.
The article refers to changes to tax law usually extending into hundreds of paragraphs every year. In the summer of 2006, 257 paragraphs were changed, in autumn of the same year another 215 paragraphs were modified and in 2007, a total of 491 paragraphs were rewritten while “only” 382 paragraph changes are planned this year. Although some “whitening” of the economy has undoubtedly occurred through this process, many of the changes have undoubtedly been piecemeal, badly thought out, or short-lived. For example, corporate tax was recently reduced from 18% to 16% but looks set to return to 18%. VAT on basic foodstuffs was increased from 12% to 15% following EU accession while the middle rate of VAT was eliminated this month, putting the bulk of goods on the 20% rate, which itself was reduced from 25% in 2006.
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