Szijjarto: Hungary rejects plans to introduce a global minimum tax
Hungary will reject the introduction of a global minimum tax because such a measure would lead to tax increases in the country, Peter Szijjarto, Minister of Foreign Affairs and Trade, told MTI, after a meeting with Mathias Cormann, the new secretary general of the OECD, Tuesday in Paris.
“It has become clear over the past decade that raising taxes is a dead end,” Szijjarto said, adding that “the most effective incentives to create jobs and trigger economic growth are tax cuts” .
“No one has the right to intervene in Hungary‘s tax policy from abroad,” Szijjarto said, insisting that the definition of tax brackets should remain Hungary’s sovereign right.
At the same time, he supported initiatives to address the question of how tech giants should be taxed, arguing that these companies should pay taxes where they operate.
Szijjarto said it was also clear that Hungary had introduced the most effective economic response measures against the crisis caused by the pandemic, adding that there was no doubt that the right economic policy was focused on reductions in taxes, investment support and job protection.
“All over the world, we are seeing the continuation of policies that make it more difficult to restart the global economy, such as those in favor of the introduction of a global minimum tax,” the minister said.
He said the concept of a global minimum tax went against the principles of the free market and was designed to benefit countries that lacked the fiscal discipline to introduce low tax rates.
Szijjarto said that one of the keys to Hungary’s competitiveness is that payroll and corporate tax rates are the lowest in Europe. Fiscal discipline was an important prerequisite for this, he said, adding that countries that had been less disciplined had not been able to cut taxes.
Hungary continues to prioritize “work over social assistance,” he said, adding that the government intends to continue cutting taxes. “We will not accept any form of international pressure or regulation that would lead to tax increases in Hungary,” he said.
At the same time, Szijjarto said it was important to find a solution regarding the taxation of tech giants, adding that they should pay their taxes in the countries in which they operate.
“We must not allow the tech giants to gain an unfair competitive advantage in the absence of international tax regulations!” he said, giving the OECD a key role in resolving the issue satisfactorily.
Szijjarto said Mathias Cormann applied a “pragmatic and sensible approach” to the issue and did not allow ideological debates to influence questions of economic policy.
Szijjarto was the first official received by Cormann since his election as the next head of the OECD.