Following several weeks of fierce debate within the ruling coalition, the government has finalised its proposal for tax changes in 2004.
The final version, which will be sent to Parliament for discussion, includes a lower corporate tax rate and lower personal income tax brackets. VAT rates will rise.
The 18% local corporate tax rate will decrease by two percentage points in 2004.
The junior coalition member, the Alliance of Free Democrats (SzDSz), will propose further corporate tax cuts in 2005 and 2006, its president, Gбbor Kuncze, said.
The government also agreed to increase the upper revenue limit under which businesses may opt for the simplified entrepreneurial tax scheme (EVA) – the flat-tax system introduced at the beginning of this year – to a gross Ft 25 million (Ђ98,000) from the current Ft 15 million.
The Budapest Chamber of Commerce and Industry (BKIK) recently suggested a Ft 30 million ceiling.
