Government of Republic of Hungary : VAT cut promotes economic growth

'The reduction in VAT promotes economic growth and results in the whitening of the economy, increased domestic consumption and lower imports' the Ministry of Agriculture's Deputy State Secretary for the Agricultural Economy Zsolt Feldman said on Hungarian M1 television's Thursday evening current affairs program.

Mr. Feldman recalled that VAT within the food sector had fallen from 1 January on fresh milk, poultry and eggs, while the consumer tax on pork carcass meat had already been reduced this time last year.

'Thanks to the tax cut, egg production and the milk and poultry sectors will become even more competitive on the domestic market, import pressure will be reduced, the economy will become cleaner and the sector will become more creditworthy', he explained.

According to the Deputy State Secretary, experience with relation to the reduction of VAT on pork indicates that savings will spiral down to domestic consumers. As an example, he mentioned the fact that despite the increase in the purchase price of pork, consumers are still paying less than they would have without the tax cut.

'There is heightened interest in further VAT cuts, and if the budget has enough room for movement the Ministry of Agriculture will recommend that the Government includes other product paths in the scheme', he added.

(MTI)