Deficit reduction package contains equal parts cost cuts, revenue increases

Banking

The government envisions in its new program a Ft 1,000 billion deficit reduction by the end of 2007, resulting in equal part from cost cuts and increased revenue, business daily Világgazdaság reported on Wednesday, citing unnamed sources.

Parties in the governing coalition will meet for the last time on Thursday to discuss the deficit reduction program. Only measures to be carried out this year will have to be approved by Parliament during the summer session, while measures for next year will be included in tax laws to be approved in the autumn as well as in the 2007 Budget Act, Világgazdaság said.
Some measures, such as a planned wage freeze in the public sector, will require discussion by the National Interest Coordination Council, a forum of employers and employees. The program includes changes to VAT, the simplified business tax (eva), the corporate profit tax and the freelancer's tax (ekho). The coalition will decide on Thursday on personal income tax rates as well as whether or not to scrap ekho.

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