Hungary: Government to discuss tax cuts

Banking

The Finance Ministry has already calculated any possible tax cuts for 2009, and the proposal will be discussed at the government session on 21 August, said Finance Minister János Veres in an interview with the daily Világgazdaság.

VAT might be decreased for some products or services and increased for others, the solidarity tax might be abolished, etc,but the governing party MSzP will not diverge from the convergence program, he emphasized. At any rate, the tax decreases might cost a few hundreds of billions of forints.

An early election would harm Hungary, since it would not enhance confidence and stability, as examples show, Veres said. The negotiations about how the 2009 budget law can be passed has started, within and outside MSzP. “Bleaching” the economy might yield a Ft 50 billion surplus in the budget in 2009. There will be decreases in expenditure and some revenue from the rearrangement of the tax system.

The ministry also calculated the effects of a flat income tax, and the party rejected the idea, said Veres. All parties who agree with a 3.2% budget deficit in 2009 will support the budget bill. (Gazdasági Rádió)

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