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The reduction of VAT will be a quick process in Hungary

January 19th, 2016

According to Mihály Varga, the Minister of National Economy the Hungarian parliament will discuss the issue of decreasing the VAT of home-building from 27 to 5 percent in an expedited procedure.

The government is planning to encourage the growth of the construction market with the reduction. If everything goes according to their plans and the number of newly built homes introduced to the market increases with at least 3 thousand next year, even the budget won't experience a loss in tax revenues. Currently there are 8-9 thousand new homes built yearly in Hungary.

The government will also reduce the bank tax with the intention of boosting lending in Hungary. Varga recalled that last year the Hungarian economy grew by 3.7 percent, which occurred in the absence of bank lending expansion. For long-term growth however this expansion would be necessary.

According to Varga the period of consolidation is now over for the Hungarian economy: it is now stable, revenues of the budget are holding and the general government deficit dropped below 3 percent.

Varga emphasized that the government will take steps in order to increase the incentive for the economy for the next year, as some trends emerged in the global market which are slowing down natural growth.

Such measures will include the more rapid usage of European Union financial support, inciting growth on the loan market, improving the flexibility of the labor market and inciting investments in the housing market.

 

(Source: http://www.vg.hu/gazdasag/adozas/varga-mar-jovore-5-szazalek-lehet-a-lakasafa-462470)

 


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