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Based on the opinions of more than 6,000 entrepreneurs from the capital, the experts from the Budapest Chamber of Commerce and Industry (BKIK) prepared their package of proposals of 7 + 1 points to modify the rules of kata, which promises a solution of commitment for decision makers and small entrepreneurs, MTI reported.
BKIK’s research shows that nearly half of entrepreneurs can imagine some increase in tax burden in exchange for keeping regulatory simplicity. In addition to the remaining tax burden, approximately a third of them see the solution in the administration.
BKIK reported that one of the most significant anomalies related to the type of tax, according to their survey, was that while in 2013 the tax rate for kata was approximately 80 percent of the tax burden paid on the minimum wage at that time. Meanwhile, the minimum wage and its tax burden have doubled. The kata income ceiling of HUF 6 million was also doubled to HUF 12 million, but the kata tax rate, which also includes social security charges, did not change, leaving HUF 50,000.
HUF 98,100 pension fund
They also point out that although the value of real income as a salaried employee is included in the pension fund, the calculation of the katas pension does not take into account the actual earnings, but the amount legally determined on the basis of the fixed monthly tax. This means a pension fund of 98,100 HUF for full-time contributors, 50,000 HUF per month, which in 2013 was still close to the minimum wage then, and now represents only 61% of the 161,000 HUF. The government tried to compensate for this by introducing a flat tax of HUF 75,000.
The chamber proposes that the current tax burden be kept at HUF 5 million and that a new tax rate of 15% be introduced above it, but that there should be various social security ratios for the additional payment.
The BKIK also considers an alternative to three different flat tax rates with up to three different percentage tax bands, such as 12.5 percent, 15 percent, and 17.5 percent.
It is also recommended that there be a full-time cat family allowance, a family allowance of at least 5,000 HUF per month for one child, 10,000 HUF per month for two children and 25,000 HUF per month for 3 children.
Reduce hidden employment contracts
According to the BKIK, the transfer of an employment relationship to a company is a very socially harmful process, so it is advisable to introduce a new single rule to stop and reduce it. They propose that over a two-year period, a special 40 percent tax be applied to any new contract for the new catastrophe when the former employee enters into a contract with his former employer or his affiliated company. This proposal would penalize the employee first and not the employer. It is typical in quite a few areas that full-time employees bill their workplaces as catechists.
According to the Budapest Chamber, controls need to be strengthened to detect catastrophic irregularities and NAV needs to receive extra-budgetary resources to make effective use of the tools at its disposal, such as the analysis of incoming account transactions online.
BKIK proposes to repeal the regulation on the 40% excise tax that applies to a customer above HUF 3 million on a customer’s income.
According to the available data, there is a majority of normal cats, whose stigmatization and punishment are socially unjust and economically harmful, noted the Budapest public body.
Cover image: BKIK headquarters Photo: GoogleMaps
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