PhD in Economics
Published in: Public Finance Quarterly 2017/2 (p. 127-149.)
SUMMARY: The article seeks to find an answer to how sharply taxation principles contrasted with practice in the case of VAT and PIT for the last 18 years in Hungary. After a comparison with historical and nearby countries, it comes to the conclusion that there was a role change of sorts occurring in our case. A (near) flat-rate system was used where a progressive system (VAT) would have been more efficient and an over-complicated version of progressive taxation was enforced until 2009 instead of a clear, flat-rate system which would have also been able to fulfil the task in question (PIT). There was a change to one of the tax categories in 2012 (PIT). There are signs indicating that there may also hope of a major adjustment for the other tax category as well.
KEYWORDS: taxation, value added tax (VAT), personal income tax (PIT)
JEL CODES: H 20, H 24, H 26