BUDAPEST, May 31 (Xinhua) -- The Hungarian government has adopted a new "Economy Protection Action Plan," whose aim is to help maintain the growth of the country's gross domestic product (GDP), official sources said here on Friday.
Quoted by the government's official website, Minister of Finance Mihaly Varga said that the package's 13+1 points include tax cuts and other measures designed to maintain economic growth.
"While the Hungarian economy continues at a brisk pace and produces one of the highest growth figures in Europe, experts predict that the economy is going to slow down in the European Union (EU)," Varga said.
"Our primary goal is to keep Hungary's annual GDP growth at 2 percentage points above the EU average," he said.
Hungary's GDP grew by 5.3 percent in the first quarter of 2019.
Among other measures, the "Economy Protection Action Plan" includes a 2 percent drop in social contribution payroll taxes beginning July 1; a tax cut for small enterprises from 13 to 12 percent effective Jan. 1, 2020; a reduction in tax administration measures; the abolishment of mandatory early tax claims for enterprises from December; and a repeal of the advertising tax, beginning in 2022.
The tourism sector is expected to benefit from the reduction of the value-added tax from 18 percent to 5 percent for accommodation services; while the construction industry will likely welcome the new 5 million Hungarian forint (17,196 U.S. dollars) ceiling for the value-added tax on the construction, expansion and renovation of real estate in small settlements.
The measures also include: financial support for businesses that invest in accommodation for the work force; the introduction of development tax allowance for small and medium-sized enterprises; a 10 billion Hungarian forint increase in capital for Garantiqa Hitelgarancia Zrt. (catalyzing loans for SMEs); a 5 billion capital increase to boost the agricultural guarantee system; financial support for irrigation system development up to an annual 17 billion Hungarian forints from 2020 to 2030; and an additional 32 billion Hungarian forints for research, development and innovation in 2020.
The package also includes the launch of the Hungarian Government Securities Plus Program. (1 U.S. dollar = 291.84 Hungarian forints)