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State secretary would see €15 billion three-year precautionary assistance from IMF

Banking

Hungary should conclude an agreement on three-year precautionary assistance worth approximately HUF 15 billion from the International Monetary Fund, broadly in line with market expectations, Prime Minister's Office State Secretary Mihály Varga said on a program on commercial television channel M2 on Monday.

He attributed the current delay in the start of official talks on the financial assistance to the need of consultations between the IMF and the European Commission on the exact conditions for the launch of the talks.
There is no decision on the final version of a financial-transaction tax proposed by the government, he said, adding that the National Economy Ministry is considering several versions. He said, however, that the tax will be linked to turnover, and those making fewer transactions will pay less. He noted that banks, not individuals, would be responsible for direct payment of the tax.
The tax could be one tenth of a percent of transaction value, however, its size is also part of the ministry's ongoing analyses. Varga added that there are no exact projections on the revenue of the financial-transaction tax, but both the National Bank and financial-market regulator PSzÁF have estimated the likely proceeds above HUF 150 billion. Varga said that another proposed tax on telephone calls and text messages is expected to cost individuals about HUF 700 per month and companies HUF 2,500 per month, near to recently published unofficial estimates.
Some propose placing a cap on the tax on telephone calls and text messages and to make a distinction between private individuals and businesses. The tax could bring in the projected HUF 30 billion this year and HUF 52 billion in 2013 if the government's growth projections materialize, he said.
Overall, Hungary must make savings of HUF 100 billion-HUF 120 billion from central budget this year and HUF 400 billion next year in order to retain the country's European Union funding.
Varga remarked that reports that he will replace minister without portfolio Tamás Fellegi are mere press speculation.

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