Mária Lakatos

Taxation in General: Hungarian Tax System

Who pays what and who receives what

The essence of social security is that the members create a compulsory risk community which is designed to secure the welfare of its members when they are old, sick, suffer an accident or are or become disabled, i.e., in all situation in which these individuals are unable for the one or the other reason to provide for themselves. The system regulates who (the individual and the economic organization) when, how (from what revenue and in what manner) has to contribute to the revenues of the social security scheme, and after this, who can count on an annuity, allotment, when, and how big this support may be.

In addition, the so-called free rider problem is to be addressed here, i.e., the situation, when masses of the society evade the obligation but these same people are not excluded from availing themselves of the services.

Since the basis of the operation of the system is social solidarity, from the contributions paid, thanks to the operation of social solidarity, also non-payers may get services (e.g., everybody is entitled to emergency medical care by virtue of his/her citizenship). The system may, however become unfundable, if it does not enforce obligatory payments.

The system prevailing now in Hungary is fairly similar to the practice of other European countries in that social security contributions are paid by large groups of income owners: companies and natural(private) persons.

The contributions paid to the health insurance fund cover the costs of in-kind health care services rendered to the payer, such as medical care, hospital treatment or the part of the costs of medicaments subsidized by the state. In addition to benefits in kind, benefits in money are also necessary to substitute the earnings lost because of the ailment, which means, that in exchange for their contributions the insured shall be entitled to receive benefits both in kind and cash.

As far as pension is concerned, in consideration for their contributions paid during the years spent in work the beneficiaries, i.e., the insured, acquire a right to an income, a pension, during their inactive years.

Taxation in General: Hungarian Tax System

Tartalomjegyzék

Kiadó: Akadémiai Kiadó

Online megjelenés éve: 2022

ISBN: 978 963 664 137 5

Taxation is a scheme for the state to provide revenue. The so collected money could then cover the public spending of the government. These are the so-called allocative and redistributive functions of the state budget. Although, taxation theory discusses the various tax types and analyses the various taxation tools very extensively, there is no absolute answer to the question, when and what type of taxation system would be optimal. Thus this introductory book on taxation deals with the three basic types of taxes - the income tax, the VAT and the corporation tax - in a very pragmatic way. There are legal texts and cases from both the international and also from the relevant Hungarian practice.

This book is recommended not only for students of economics but also for law students and practitioners beside anyone who is interested in the basic regulations of taxation.

Hivatkozás: https://mersz.hu/lakatos-taxation-in-general-hungarian-tax-system//

BibTeX EndNote Mendeley Zotero