Hungarian insurers will no longer pay the extraordinary levy on financial sector companies from next year, the National Economy Ministry said on Tuesday, confirming a measure outlined in the recently unveiled Széll Kálmán Plan 2.0, an updated structural reform program.
"From December 31, 2012 insurers' obligation to pay the extraordinary tax will be eliminated," the ministry said. Under the Széll Kálmán Plan 2.0, a unified tax on insurance products is to replace the bank levy, the accident tax and the fire prevention tax that Hungarian insurers pay at present.
The unified tax will vary according to product type: the rate for accident and asset insurances will be 10%, the rate for comprehensive vehicle insurance will be 15% and the rate for mandatory vehicle insurance will be 30%. Life insurance products will be exempt from the tax. The government aims to achieve a fiscal improvement of HUF 15 billion in 2013 from the measures.
The ministry also reiterated the government's plan to gradually phase out the bank levy across the entire financial sector, at least halving the tax from 2013.
The ministry said it was discussing with the Hungarian Banking Association "ways to create a tax structure better tailored to economic policy goals and in which financial institutions take an appropriate share in public burdens".
The government agreed with banks late last year to halve the bank levy from 2013. The ministry also confirmed on Tuesday that it aimed to eliminate "crisis taxes" levied on the retail, telecommunications and energy sectors for three years from 2010.