Value Added Tax Increase a Burden for Consumers in Hungary
Hungary’s value added tax (VAT) is currently the highest in the European Union, states Zsofia Megyeri, research analyst at Euromonitor International. This high tax rate of 27% is a way for the government to make up for the country’s large, growing budget deficit, but comes as a problem to Hungarian consumers. Consumer purchasing power in Hungary is expected to decrease in the next 5 years for all aspects of life, including food products, housing and utilities. As prices of food go up, the size of the Hungarian black market, which is already estimated to be between 15-20 percent of total retail value sales, is also expected to rise.