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New Taxes in Hungary's Euro Plan


The Hungarian government has recently adopted the second part of its ‘Szell Kalman’ plan, forming part of the country’s euro convergence programme and containing new tax measures to help shore up the country's revenue base.

According to the government, the Szell Kalman plans, which have been submitted to Brussels, are intended to ensure that Hungary’s deficit returns to 2.5% of gross domestic product (GDP) in 2012 and to then 2.2% in 2013. The measures contained in the programme aim to maintain budgetary stability in the long-term and to kick-start growth.

The government stressed that the second part of the plan is designed to finalize the transition to a tax system based on consumption, thereby enabling the government to reduce labour taxes.

Underscoring that the proposed new tax measures are of a structural nature, to ensure the long-term stability of fiscal revenues, the government unveiled plans to introduce a financial transactions tax in Hungary from 2013, levied at a rate of 0.1% on bank and post office transactions, and to impose a telecommunications tax of HUF2 (USD0.009) per minute of connect time from July 1, 2012.

The telecoms tax is expected to generate around EUR170m for the state.

Commenting on the latest Szell Kalman plan, state secretary at the economy ministry Zoltan Csefalvay emphasized that the initiatives should enable the country to exit the crisis and to convince both the European Commission and the markets that the government is able to keep the country’s deficit in check.

The proposed package of measures should also enable the government to secure a financing deal with international moneylenders, Csefalvay ended.

Source: http://www.tax-news.com