BUDAPEST: The Hungarian Government has said that the country’s deficit dropped to 2.6 percent of gross domestic product, below projections of 2.9 percent, on account of higher tax collections and a strengthening economy.
Among the main revenue streams, value-added tax (VAT) performed particularly strongly, rising 11.8 percent during 2014. There is limited scope to raise Hungary’s indirect taxes however, beyond efficiency gains. Hungary’s value-added tax rate is already the highest in the European Union, at 27 percent, and its recent proposals for additional sectoral taxes, such as its advertising tax on media organization, have drawn criticism.