Govt approves new taxes in Széll Kálmán Plan 2.0

Banking

Hungary's government approved the introduction of new taxes on telephone calls, on financial transactions and on insurance products at a cabinet meeting on Wednesday, government spokesman András Giró-Szász said. The taxes were outlined two weeks earlier in the Széll Kálmán Plan 2.0, an updated version of a structural reform program launched more than a year earlier.

National Economy Minister György Matolcsy said the decisions on the taxes would remove the doubts of experts from the European Union and the International Monetary Fund as Hungary phases out "crisis taxes" and the bank levy, and they would ensure that the country's general government deficit is continuously under the 3% of GDP threshold in the coming years. Matolcsy noted that Parliament would take the final decisions on the details of the taxes. He added that consultations on the taxes would continue.
   He said consultations would also continue on the introduction of a 30% corporate tax rate for energy companies and utilities in addition to the current two, 10% and 19%, rates.
    A HUF 2-per-minute telephone tax will be introduced on July 1. The first ten minutes of calls every month will be exempt from the tax and the monthly tax per subscriber will be capped at HUF 700. A cap of HUF 2,500 will be set for corporate subscribers. Telecommunications service providers will cover any difference over the cap.
    Matolcsy said telecommunications companies could try to pass on the tax to consumers, but competition as well as technical challenges would make it very difficult. He added that banks had not been able to pass on the burden of the bank levy to clients nor had insurers been able to pass on the burden of the accident tax.
    A 0.1% tax on financial transactions will be introduced from 2013. Calculating with annual financial transactions of about HUF 600,000 billion, excluding those initiated by the National Bank of Hungary or transactions with the Treasury, the tax will generate about HUF 130 billion in 2013.
    The tax will not apply to money transferred by private individuals to different accounts in the same bank. The tax will be payable by banks.
    Matolcsy said companies would be required to use bank transfers for all business-to-business transactions over HUF 5m to avoid a shift towards the grey economy. He added that no threshold would apply to private individuals.
    Matolcsy said insurers would no longer pay the extraordinary levy on financial sector companies, but they would pay a new tax on insurance products.

ADVERTISEMENT

Reforms to raise productivity would strengthen recovery - OE... Analysis

Reforms to raise productivity would strengthen recovery - OE...

Meeting called to address Pegasus spyware lacks quorum  Parliament

Meeting called to address Pegasus spyware lacks quorum 

Skanska commercial dev unit names new EVP of operations Hung... Appointments

Skanska commercial dev unit names new EVP of operations Hung...

Zsa Zsa Gabor's ashes buried in Budapest City

Zsa Zsa Gabor's ashes buried in Budapest

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.