Hungary's prime minister says the government will introduce a flat corporate tax rate of 9 percent from 2017, the lowest in the European Union.

Prime Minister Viktor Orban said the new rate is part of the government's efforts to boost competitiveness. The current rates are 10 percent on annual corporate profits below 500 million forints ($1.7 million) and 19 percent above.

Economic Affairs Minister Mihaly Varga said Thursday the new rate would reduce tax revenues next year by 145 billion forints ($499 million). No new taxes were announced to make up the shortfall.

The opposition party Politics Can be Different said the change will make Hungary a "tax haven."

According to advisory firm KPMG, the average corporate tax rate in the 28-country EU this year was slightly above 22 percent.