Macroeconomic Forecast Hungary

Hungarian Prime Minister Ferenc Gyurcsany unveiled a HUF1,200bn multi-year tax cut on August 26, which will include a HUF300bn reduction in 2009 followed by further cuts in proceeding years. The tax reduction is to be achieved by scrapping the 4.0% "solidarity" surcharge on businesses (although the basic corporate income tax rate will be raised from 16% to 18%), a 5.0% cut in employers' social security contributions, and a small adjustment to personal income tax brackets.

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