The opposition Socialist Party has called on the government to reduce certain VAT brackets to alleviate cost pressures on poor people. A broader swathe of society face impoverishment, including graduates and Budapest residents, with single parents especially exposed to poverty, the party said in a statement on Friday, citing research by the TÁRKI institute. Two-thirds of employees did not receive a wage increase last year to offset high inflation, it added. VAT on basic foodstuffs should be reduced to zero percent, the statement said, adding that in Spain this bracket was abolished with inflation of 6.8%, while in Hungary inflation is running at over 22%, stoking a “brutal food tax” on Hungarians.
Also, tax on household energy should be set at 5%, the party said, also arguing that electricity produced at the Paks nuclear power station should be sold at cost, while the government should withdraw higher network usage fees.