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Government to raise transaction duty, telecom tax

Banking

The government will propose raising the financial transaction duty, the telecom tax on companies and the mining royalty, National Economy Minister Mihály Varga announced on Monday.
    The proposed tax measures, if approved by Parliament, could improve the budget's position by as much as HUF 100 billion, the economy ministry told MTI. It was not immediately clear whether the proceeds include a 7% one-off payment banks will have to make on municipal debt repaid or taken over by the central government under a proposed budget amendment. Econews estimated the proceeds of the latter measure to about HUF 42 billion.
    The government proposes to amend the budget on the one hand, and to raise taxes on the other, Varga said. It approved the measures on Monday and has already submitted the respective bills for urgent consideration to Parliament. The measures are expected to be introduced on August 1.
    The government approved the measures with the aim to ensure that Hungary will not get back under the excessive deficit procedure (EDP), which is expected to be lifted, he said. Another reason is lower-than-earlier-expected inflation, which reduced budget revenue from the transaction duty, VAT and the excise duty as a result, he said.
    The government has proposed raising the financial transaction duty from 0.2% to 0.3%, with an unchanged HUF 6,000 per transaction cap, the bill before parliament revealed. The duty on cash withdrawals will, however, double: from 0.3% to 0.6% and the HUF 6,000 limit will no more apply on these transactions.
    The telecom tax will be raised from HUF 2 to HUF 3 on company telephone calls and SMSs under the bill. The per month tax limit for calls and SMSs initiated from any one telephone number will also double from HUF 2,500 to HUF 5,000. The tax for private individuals will remain HUF 2 and HUF 700 a month per number.
    The mining royalty is to rise from 12% to 16%. They plan to extend the payment of health contribution to interest rate revenue, with a 6% rate.
    As part of the proposed amendment to the central budget, the government also decided to guarantee the preferential loans to be granted to road haulage companies as part of a package of measures agreed with trade leaders in connection with the introduction of an electronic toll system for vehicles over 3.5 tonnes on July 1.

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