Finance Ministry State Secretary Laszlo Keller said at the meeting of Parliament’s Employment and Labour Affairs Committee on Monday that the government’s plan to modify the tax system would decrease employment taxes as well as the tax wedge.
About 87pc of taxpayers would pay the basic 19pc personal income tax beginning in 2010 according to the proposed modifications, while marginal taxes would decrease to 26pc from 45pc. The tax wedge, or the quotient of taxes and commissions of employers and employees divided by total cost of work, would drop to 47.4pc from 54pc for average wages and to 48.5pc from 56.6pc for incomes above gross HUF 240,000.
The committee also discussed the proposal to raise the retirement age by three years to 65 beginning 2027.
Social and Labour Affairs Deputy Head of Department Agnes Varga said that in addition to the higher retirement age, the extra month’s pension would be eliminated from 2010 and incorporated into regular pension payments.
In calculating pensions, the consumer price index would remain at 50pc with GDP growth above 4pc, while the other 50pc would be raised in line with net wage increase.
In case of only 2pc GDP growth, pensions would increase with the consumer price index, between 2pc and 3pc net wages would weigh in 20pc, and between 3pc and 4pc net wages would be responsible for 40pc.