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Bill would exempt interest on retail govʼt securities from tax

A bill submitted to Parliament by Minister of Finance Mihály Varga on Tuesday would exempt retail investors from tax on interest income earned on government securities, state news wire MTI reported. At present, the tax rate on interest income is 15%.

Minister of Finance Mihály Varga

The exemption would apply to retail government securities issued from June 1, 2019, according to the bill.

Varga said that "increasing sales of government securities to households is an important economic policy goal" in the justification of the bill.

Hungaryʼs Government Debt Management Agency (ÁKK) targets an HUF 800 billion increase in the stock of securities targeted at retail investors this year.

The bill would also broaden the activities of home savings banks to include sales of government securities. Hungarian lawmakers voted to phase out state subsidies on home savings bank deposits last year, MTI recalled.