It is up to the MNB whether to pass on the transaction duty, Orbán says


The government will not participate in the dispute over extending the planned new financial transaction duty to the central bank, as it is up to the central bank how to proceed with the duty, Prime Minister Viktor Orbán said in a Friday morning interview on the public radio.

Orbán said he still expects to see a lot of dispute over the extension of the duty to the National Bank of Hungary (MNB), adding that the extension is one of the resources financing the government's job-saving action plan.

The government will not, however, participate in this dispute as the central bank is independent and it will act on its own considerations, Orbán said.

"Whether [the MNB] passes [the duty] here or there, puts the burden on the banks or pays it itself -- the government cannot participate in this dispute", the Prime Minister said.

He stressed, however, that everyone will pay the transaction duty, and the MNB cannot be an exemption.

Orbán said that Matolcsy has many other plans in preparation including a plan to boost investments, which the government will discuss in the autumn.

Orbán's comments came after the MNB issued a critical opinion of the proposed measure on Thursday. In a letter sent to National Economy Minister György Matolcsy and published on the MNB's website, National Bank of Hungary (MNB) governor András Simor said that the imposition of the duty to the central bank would only temporarily raise budget revenues while it would violate the central bank's institutional and financial independence, may even raise the question of violation of the ban on monetary financing, and the imposition without a cap may even run counter to the constitution.

The amendment, which also proposed to extend the duty to the state treasury, and, except for the MNB and the treasury, would introduce a HUF 6,000 per transaction cap, was submitted to a bill on the financial transaction duty before parliament by the parliamentary audit and budget committee on June 28.

Matolcsy said the government would raise HUF 100 billion from the NBH and another HUF 100 billion though the extension duty to finance the job-saving plan which would cost HUF 300 billion.


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