The cabinet will decide on the action plan on Monday and Prime Minister Viktor Orban will present it to parliament on Tuesday, Minister of National Economy Gyorgy Matolcsy said on Monday, confirming that the plan would be aimed at maintaining the current 3.8pc general government deficit target. The other main objective of the plan is to kickstart growth, he said.
Hungary’s new, Fidesz-led government started an extraordinary three-day cabinet meeting on Saturday to formulate a government’s economic action plan aimed at meeting Hungary’s established 2010 deficit target of 3.8pc of GDP, Prime Ministerial State Secretary Mihaly Varga announced on Saturday after presenting an interim report of his fact-finding commission on the state of the budget.
Speaking on a television program on Monday morning Mr Matolcsy stated that there was no need to introduce new austerity measures, adding that the government could meet its fiscal objectives through cutting bureaucracy. They plan to stimulate investment and accelerate Hungary’s call-down of European Union funding, he said.
The minister of national economy said that government is examining the practice of neighbouring countries of flat-rate personal income-taxes of between 15pc and 20pc. He said that the government could introduce such a flat tax in January 2011, and could introduce flat-rate family taxation within two years.
Mr Matolcsy said that they will be able to phase out as much as a fifth of the current 58 taxes and launch a three-year radical tax reduction programme yet this year.
The government is considering the introduction of a flat income-tax of around 16pc, Prime Ministerial Spokesman Peter Szijjarto said on Sunday, in the break of a three-day extraordinary cabinet meeting.
The prime ministerial spokesman added that one of the main direction of the government’s economic policies continue to be tax cuts.