Economy minister would introduce financial sales tax

Banking

National Economy Minister György Matolcsy is in favor of introducing a financial sales tax, the weekly Heti Válasz reported on Thursday.

"There is no sales tax in the financial system, and as we shift the focus of taxation to sales and consumption we must introduce a financial sales tax," Matolcsy told Heti Válasz.

In connection with the VAT, Matolcsy said "five tax rates would be better, 5%, 15%, 20%, 25% and 30%, but the European Union will not consent to that for the moment".

Matolcsy continued: "We are moving towards a five-rate tax system imposed on labour costs, which recognizes the inequalities of the Hungarian workforce in terms of demand and supply". "Besides the general 100% rate, there is already a 50% rate (for one year for those leaving the public sector and for part-time employment of women) and a 0% rate (for workers with a rehabilitation card and "start-workers"), but we will also need a 25% and a 75% rate," the minister said.

Matolcsy also mentioned a simplified entrepreneur's tax for small businesses employing fewer than 30 workers as well as a preferential tax in free business zones in underdeveloped regions.

The European Commission last year officially proposed the introduction of a financial transaction tax called "Tobin tax" from 2014, but member states are highly divided on the matter. The UK in particular strongly opposed the idea.

However, opinion polls suggest the plan is popular among European citizens.

Matolcsy recently said the Hungarian position on the transaction tax will be finalized when the acceptance or rejection of the draft directive can be foreseen based on member states' standpoints.

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