The Hungarian government has announced plans to halve the country’s bank tax in 2013, before subsequently abolishing the levy in 2014.
According to Hungary’s Economy Minister Gyorgy Matolcsy, if by then there is a financial transaction tax at European Union (EU) level, then the government in Budapest will examine whether or not to re-introduce the charge.
Introduced back in 2010 to generate additional tax revenues with which to respond to the challenges of the crisis and to meet the budget deficit demands of the European Union, Hungary’s bank tax was originally due to be halved this year, and finally abolished in 2013. However, the government decided to extend the duration of the tax in March last year, much to the disappointment and annoyance of the country’s banks.
The government’s new ‘Szell Kalman’ plan, forming part of the country’s euro convergence programme and containing new tax measures to help shore up its revenue base, provides for revenues from the bank tax in 2012 of around HUF180bn (EUR619m).
The introduction of planned new taxes will create the scope to remove the levy.
Within the framework of the Szell Kalman plan, aimed at finalizing the transition to a tax system based on consumption rather than labour, Budapest now plans to introduce a financial transactions tax in Hungary from 2013, levied at a rate of 0.1% on bank and post office transactions.
The government also plans to impose a telecommunications tax of HUF2 per minute of connect time from July 1, 2012, a measure expected to generate around EUR170m for the state. The tax will be imposed after the first ten minutes of connect time and capped at a monthly limit of HUF700 for individuals and HUF2,500 for businesses in Hungary.
In accordance with the government’s plans, a unified tax on insurance companies will also apply, and a 30% rate of corporation tax will be applied to energy service providers and public utility companies.
Finally, under the plans, businesses in Hungary will be required to make payments excess of HUF5m via bank transfer.
The proposals are due to be submitted to parliament for approval shortly.