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Applying transactions duty to securities could put capital market at disadvantage, says bourse

The introduction of a duty on financial transactions could put Hungary's capital markets at a disadvantage compared to peers in other European Union member states, The Budapest Stock Exchange and the Association of Investment Service Providers said in a joint statement on Tuesday.

Parliament recently approved legislation that will introduce the duty in 2013, and a bill now before lawmakers would double the rate for most transactions from 0.1% to 0.2%. The duty is part of a number of fiscal improvement measures earlier announced by the government. The bourse and the brokers association acknowledged the importance of the government's goal to achieve fiscal balance, but said the duty should be applied to securities transactions only at the same time as such a tax is applied across the EU. Otherwise, Hungary's capital market could be competitively marginalised, negatively affecting the attraction of the Hungarian economy to investors, the statement said.