Gov’t could raise some taxes, introduce ad tax to ensure deficit procedure is lifted

Banking

Hungary's government could raise the financial transactions duty, the bank levy and the energy tax, as well as introduce a tax on advertising, to ensure the European Commission's excessive deficit procedure (EDP) against the country is lifted, Prime Minister Viktor Orbán said after a summit in Brussels late Wednesday. Hungary's government announced early in May that it would freeze budget expenditures worth about 0.3% of GDP -- the difference between the European Commission's projection for the country's fiscal deficit in 2013 and the government's -- to make certain the country can exit the EDP. If the freezes for 2013 and 2014 are insufficient, the government said it would suspend big, one-off state investments unless it can cover their costs from the sale of state assets. And if these measures are still not enough, the government said it would raise taxes.
    Orbán said on Wednesday that he was “representing at internal debates” on the matter the position that the government go through with the suspension of the big investments and the higher taxes, in addition to the spending freeze. “When I arrive back home, I'll get the law on tax increases that could mean [an increase of] the financial transactions duty, the bank levy, the energy tax and the introduction of a new advertising tax,” he added. Orbán said the government would continue its policy of cutting utilities prices not only for households, but for businesses. “We will reduce the price of energy used by businesses, too, with the tools of the state,” he said. The deregulated energy market in Europe still does not work, and it is not expected to result in a real drop in prices for the mid-term; until then, regulatory tools are necessary, he added.

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