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Government to raise excise taxes, gambling tax

MNB

Hungary's government has decided to raise the excise tax on cigarettes, alcohol and diesel fuel as well as the gambling tax to fill a HUF 100 billion "hole" in this year's budget because of lower than expected growth, National Economy Minister Gyorgy Matolcsy said on Tuesday, after a two-day government session.

Matolcsy said the government will also accelerate the restructuring of the government and introduce a "full stop" on procurements, expected to save HUF 40 billion. It will also collect VAT and excise tax faster and more efficiently, which is expected to generate an additional HUF 40 billion in revenue, he added.

Hungary's government is responding to the economic slowdown in Europe by speeding up renewal in the country, reducing state debt and taking steps to prevent that debt from re-accumulating by keeping fiscal deficits under 3% of GDP, Matolcsy said.

Prime Minister Viktor Orban, speaking before Matolcsy, said Hungary's state debt automatically falls if the fiscal deficit is under 3% of GDP.

Matolcsy said the government expects 2% GDP growth both in this year and next. Orban added that the estimate was a cautious one.

The debt projections are down from the previous government forecast of 3.1% GDP growth this year and 3.0% next year.

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