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Best way to collect extraordinary tax? Make it voluntary, says tax expert

The best way to guarantee that an extraordinary financial sector tax planned by the government raises HUF 200 billion this year is to get banks to voluntarily pay the tax, Csaba László, a tax expert at consultancy KPMG and a former finance minister, said at a press conference on Thursday.

Prime Minister Viktor Orbán announced the planned tax on June 8, but revealed little about it other than that it will generate revenue of HUF 187 billion (HUF 200 billion including the HUF 13 billion expected from the financial sector duty). Financial sector professional associations and government officials are negotiating the details of the tax.

László said the tax would not raise HUF 187 billion if the tax base were to be profit. Even if a law introducing the tax was approved by the end of June, the tax could not come into force until 45 days later and would only apply to profits earned after that time, which are unlikely to be enough to meet the targeted revenue, he explained.

The tax will probably cause a decline in banks' lending activity, László said. "The HUF 200 billion appears to be too much," he added. (MTI-ECONEWS)