Speculation was rife in Hungary on Tuesday, ahead of the release of tax cut proposals by the Big Four accounting firms, Deloitte, Ernst and Young, PricewaterhouseCoopers and KPMG.
According to reports in the national media, the audit firms were set to come forward on Tuesday with proposals for tax cuts worth up to 1,200bn forints (EUR5.1bn).
National daily, Nepszava, among other news providers, suggested that the plans would likely aim at reducing tax centralisation by 4.45% of GDP, which would include tax cuts worth between 1.5% and 2.5% of GDP, starting next year.
To compensate for the reductions, it was expected that the accounting firms would suggest a reduction in state spending, and the streamlining of expenses in the welfare and administration sectors.
Realdeal.hu further reported that in addition to this, the plan would also call for an altering in personal income tax brackets from the current 18% and 36% to 20% and 30%, and would also put forward the idea of scrapping the "solidarity tax", a suggestion that has already been under consideration .
Earlier this year, in July, Hungary's Finance Minister János Veres spoke to assure taxpayers that he will do all he can to continue simplifying the country's tax system.
Data collected from reports by both the World Bank and the consultancy PricewaterhouseCoopers International Ltd (PWC) ranked the complexity of the Hungarian tax system as “average," meaning that companies bear an average amount of administrative burden, according to the Budapest Business Journal.
The BBJ further reported that Mr Veres was particularly pleased with how well the implementation of new tax filing systems had gone, with 100,000 more individuals choosing to administer their tax affairs online than last year, and 300,000 more choosing to fill and check their tax forms online.
This news in turn followed earlier reports that the Hungarian government was planning significant reductions in tax and contributions in 2009.
The Finance Ministry is expected to present its 2009 budget to Parliament at the end of September.
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