Christian Democrat leader Zsolt Semjen on Saturday pressed for tax cuts as an indispensable condition for Hungarian businesses to stay afloat.
“The tax rises and austerity packages advocated by the neoliberals do not offer a passable road,” he said at the 3rd congress of the Christian Democratic People’s Party, a close ally of Fidesz, which is tipped to win a landslide in the April elections.
“At present a Hungarian business has three options: going bankrupt, evading taxation or moving to Bratislava to pay taxes there,” he said.
To give a boost to economic growth, benefits should be granted to Hungarian small and medium-sized enterprises rather than to multinational companies which control a large part of the Hungarian economy but employ but a fragment of the workforce, Semjen said.
Semjen missed one, “not going into business in the
first place”.
Interesting comment “multinational companies which control a large part of the Hungarian economy but employ but a fragment of the workforce” Apart from the usual rant against “multinationals” what this statement is say in another way is the companies that don’t have a large market share but employ large amounts of people need government help to stay in business. Are companies that employee more people than they need not just inefficient? Perhaps a better way of reducing the tax burden of those who actual pay taxes, is to stop those who avoid paying them, then everybody could pay less tax. Another way is reduce the number of people employed inefficiently in another organisation i.e. the state. Not to mention the enormous amount of politicians in the local, regional and national governments paid for by the tax payers
I think here, part of the issue is that the multi-nationals that Semjen cites are those that get tax breaks which in part must be funded by the remainder of the economy. However, he misses a couple of key points:-
We have many SMEs simply to get round the tax law; these are 1 (wo)man operations usually, trying to either work within the EVA or offset cost system in order that the ‘worker’ can be employed elsewhere at a near acceptable cost.
There are a lot of zombie companies out there, where the owners don’t dare shut them down and cannot take them dormant, as they may be needed in future when there is work – as few believe the tax laws are ever going to foster work.
Some of these multis stick around only as long as the break exists, and/or employ staff who aren’t taxable in HU anyway (I’m thinking of Hankook, Audi; and am wondering if Mercedes is more of the same).
However, the single largest employer in the country is the state; now if that were smaller, perhaps we wouldn’t have to have such high taxes in the first place. However, this raises another fear. Most of those people would not be absorbed into the private sector (as such is so choked anyway) and instead would end up on the dole. So we might as well make sure they have desks, brooms, a reason to be officious, and a huge golden handshake with subsequent consultancy while retiring early benefits.
Within 12 months Magyarorszag government will effectively go bankrupt. So many of the government jobs, government spending will end even with government inaction. The Government will default on its debt and will be unable to borrow monies. Depend on the government for your employment or livelihood? Prepare yourself for the inevitable.
Does Mr Orban say anything about tax cuts? It could
only be supported by reductions in public spending,
which would make Mr Popular very unpopular indeed.
@Ringo. Yes, Orban is talking about cutting taxes
but isn’t a fan of a single rate. How such will be
covered is more a mystery.
Hungary is in a mess. Is a mess.
No proper plans are drawn up for reforming the justice and tax systems. Corruption is endemic and people get by from day to day duckin’ and divin’and not paying tax because they can’t afford it.
AFA the direct tax is currently at a crippling 25%
and prices in the supermarkets et al go up on a more-or-less daily basis.
An election is just around the corner and the usual politicians drivel seeps out like puss from a weeping sore.
We all should be weeping. That is to say: those that have to eke out a living in communist Hungary.