Hungarian tax burden skyrocketing

Hungary is still in the top three concerning the taxes and contributions among the countries of the Organization for Economic Co-operation and Development (OECD). According to the recent analysis made by the organization, the Hungarian state receives 48.2 percent of the gross incomes without family discounts. The only two countries with higher tax wedge are Belgium (54 percent) and Germany (49.4 percent), as Magyar Nemzet Online reports.

The Czech Republic is the closest to Hungary from the region in this respect: they rank eight on the list with 43 percent rate of taxes and contributions. The other two V4 countries, Slovakia (41.5 percent) and Poland (35.8) are the 12th and 23rd, respectively. The lowest tax wedge is in Switzerland, where only 21.8 percent of the gross income goes to the state. Among the EU countries, the Republic of Ireland ranks the lowest with 27.1 percent.

Hungary’s situation is somewhat better concerning the family discounts: married couples with at least two children have to contribute with only 33.7 percent of their income. Hungary is the 11th on this list, even though the country is still below the OECD average of 26 percent. The other three V4 countries have more favorable ranks by three to six percent.

Besides percentage, OECD also examines the exact sums spent on taxes: while an average employer in Germany, Switzerland or Belgium provided 74,000 thousand dollars (62,352 euros) for the state in 2016, Central European countries were about half as “profitable”: this sum was 32,930 dollars (27,746 euros) in Hungary, 34,700 dollars (29,238 euros) in the Czech Republic, 31,930 dollars (26,904 euros) in Poland and merely 30,000 dollars (25,278 euros) in Slovakia. The average among the OECD countries is 36 percent, which means 50,000 dollars or 42,130 euros annually.

Another study by the organization, which was published in July, concerns how each country used its resources in 2015. The rate of state investments and GDP was 6.7 percent, which is twice as much as the OECD average. 17.3 of public expenses belonged to the “economy functions” category, which is the highest among the OECD countries. The average of the whole organization was 9.3 percent. Economy functions cover for example employment and traffic development. Hungary shows an increasing tendency in this field compared to the data from 2007, while most of the examined countries stand still. The average sum compared to the GDP was 18.7 percent in the OECD, while Hungary only spent 10.6 for this purpose. A similar percentage was spent on public education. It is also below the average. Moreover, this rate was above 17 percent in countries like Iceland, Switzerland, and Israel. 29.9 percent was spent on social support in Hungary, while the OECD average was 32.6 percent in this field.

ce: ZsK

Source: Magyar Nemzet Online