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Simplified business tax to stay in 2012

Banking

The Simplified Business Tax (eva) will remain in place in 2012 but the tax rate will be raised, Fidesz parliamentary group head János Lázár told MTI on Monday, after a meeting of the government and MPs of Fidesz-KDNP.

They convinced me," Prime Minister Viktor Orbán said when asked about the debate on future of the Simplified Business Tax with MPs of governing Fidesz-KDNP on Monday.

Orbán, who was leaving a meeting with the MPs, did not elaborate further. But said the contents of the agreement would be announced by National Economy Minister György Matolcsy.

Lázár said after a meeting of the MPs a week earlier that Orbán took a firm stand on eliminating the Simplified Business Tax, but MPs had asked the cabinet to consider the possibility of keeping the tax for one more year and raising the rate to 35%.

Companies with annual revenue under HUF 25m may opt to pay the Simplified Business Tax, also known by its Hungarian acronym "eva", instead of the conventional corporate profit tax. Companies that pay eva pay 30% of their revenue and may not make any deductions from their tax base.

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