Hungary’s Socialists Want To Raise Top Rate Of Tax

by Ulrika Lomas, Tax-News.com, Brussels

08 July 2004

Hungary’s ruling Socialist Party revealed on Tuesday that it wants to increase taxes for the wealthy in order to pay for improvements in welfare programmes and boost the government’s budgetary situation, thus improving its chances of joining the single European currency.

Party officials announced at a news conference that they are seeking to reintroduce a capital gains tax, and to increase the top rate of income tax on salaries above 6 million forints ($29,680) per year to 48% from the current level of 38%.

Since suffering badly at the polls in the recent elections to the European Parliament, the Socialist Party is seeking to reach out to its core working class vote, a policy reflected in earlier draft proposals promising a more "assertive leftist economic policy."

The government is also seeking more cooperation from the National Bank of Hungary regarding its euro convergence plan. The institution has received criticism for holding interest rates at 11.5%, the highest in the EU.

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