The Evolution of the Tax Structure of a Reforming Transitional Economy: Hungary 1988–98

Authors: Newbery D.M.¹; PhD²; Révész T.²; PhD³

Source: International Tax and Public Finance, Volume 7, Number 2, March 2000 , pp. 209-240(32)

Publisher: Springer

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Abstract:

The paper analyses the revenue-raising, distributional and incentive effects of the personal tax system in Hungary from the start of the transitional tax reforms of 1988 to 1998, and shows that the tax structure has converged to an almost linear form similar to the more heavily taxed EU countries. The 1998 pension reform has reversed a trend increase in average and marginal tax rates but marginal rates still appear too high for a country wishing to encourage growth and employment creation.

Keywords: tax reform; tax burden; efficiency; equity; redistribution; Hungary; transition

Language: English

Document Type: Regular paper

Affiliations: 1: Institut d'Anàlisi Economica, CSIC, 08913 Bellaterra (Barcelona), Spain 2: University of Cambridge, England 3: University of Cambridge, England and Budapest University of Economics, Hungary.

Publication date: 2000-03-01