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ECB, MNB evaluating Hungary proposal to extend transactions duty to cbank

Initiatives

The Hungarian government has officially asked both the European Central Bank and the National Bank of Hungary (MNB) to evaluate an amendment proposal seeking to extend a planned financial transactions duty to the MNB.

 The ECB has received the request, press officer Eszter Miltényi told MTI on Tuesday, confirming an earlier report by news portal index.hu. Miltényi said, without indicating when the European bank would complete its report.

The MNB officially received the amendment and the request for an opinion on Tuesday afternoon, the bank's press department told Econews, confirming Dow Jones information.
The amendment, submitted by the parliamentary audit and budget committee to a bill on the financial transaction duty on Thursday, proposes extending the duty to the MNB's financial transactions related to one-day to two-week central bank deposits as well as to transactions by the State Treasury, among others.

On Friday, MNB governor András Simor called the attention of the House Speaker that the opinion of the MNB as well as of the European Central Bank (ECB) must be asked on any proposed legislation that concern the activities of the central bank, refering to Hungary's central bank act and the European Treaty.

On Monday Simor said the amendment interferes with monetary policy operations and called it "illegal, dangerous and unintelligible".

Antal Rogán, group leader of the ruling Fidesz party, said in reaction to Simor's remarks that if commercial banks are required pay the duty then it would be hard to explain why the central bank should be an exception.

Prime Minister Viktor Orbán on Monday announced plans to cut taxes and red tape for small companies and for employers who take on under-25s, seniors or unskilled workers, to be financed from the transaction duty.
National Economy Minister Matolcsy said on Thursday they expect HUF 100 billion of the HUF 300 billion action plan would be financed from extending the transactions duty to specified deposit transactions of the central bank and to the State Treasury.

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