1987. május (53-73. szám) / HU_BFL_XIV_47_2
^ mi Z4/0 tittl« Rutkell Street, LONDON, ItfC.f • Te/. (W-440 at & • G. Krosai 53/1987 /E/ 6th May, 1987 Draft Plán fór the Introduction and Scale of Personal Income Tax Those Hungárián economists, who see the way out of the country’s critical situation in introducing economic reforms more consistently than before, ürge since long the transformation of the system of salaries and the introduction of the Western type personal income tax. According to the economists standpoint, salaries ought to comprise the income tax, as well as the house rents and the cost of Services which, on the other hand, ought to be determined by markét laws. The government in the years pást regularly increased rents and the cost of Services, bút there is no sign of the proposed transformation of the system of salaries. As fór the income tax, however, on the latest session of the Party Central Committee on the 28th of April a resolution was passed, according to which - as the communique issued on the session pút in words - "the possibility and precon- ditions of the introduction of personal income tax" will be investigated, and experts and the managing bodies of state and social organisations will be reques- ted to give their opinion. The confidential draft plán submitted to the functionaries and experts recent- ly reached the West. Considering the fact, that this is an optional plán destined fór discussion, it contains surprisingly exact and detailed regulations and it seems unlikely that it would come to serious polemic with the possible exception of a few side-issues. According to the draft, the tax-free zone will reach to 4000 - in the case of civil servants 5000 - forints per month, while on the proportion of the income which exceeds this limit, a Progressively increasing 20-60% tax will be imposed. All financial allotments, i.e. even the sick pay, contribution to the construction of flats, innovation award, will be counted in the income. The date fór the introduction of the tax has been set fór the lst of January, 1988. The recommendations of the plán make it likely that on the change-over a differentiation of wages will alsó be carried out, i.e., incomes less the tax will remain unchanged on company level only, while individually they will increase or deerease. According to the plán, no tax will be imposed on pensions, bút if the pensioner has any other income, his earnings and pension must be combined in calculating the tax-rate of the proportion of the income over the pension. Even this draft hasn't been made known to the population. The plans fór the introduction of the personal income tax aroused wide-spread anxiety in Hungary; many presume, that the government will use the new tax fór reducing further the standard of living.
