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Crisis taxes to be phased out after 2012, bank levy to be halved from 2013

Measures outlined in a government reform plan will allow crisis taxes to be “entirely” phased out after 2012 and the bank levy to be halved from 2013, National Economy Ministry state secretary Andras Kármán said in a video message posted on the government's website.

The Széll Kálmán plan, unveiled by National Economy Minister György Matolcsy on Tuesday, aims to reduce government debt, while fostering economic growth and employment. Under the plan, the bank levy is to cost financial sector companies HUF 187 billion in 2012, instead of the earlier expected HUF 93.5 billion. The bank levy generated about HUF 182 billion in budget revenue in 2010, the year it was introduced, and is targeted to bring in HUF 187 billion in 2011.

The government also introduced “crisis taxes” on the telecommunications, energy and retail sectors in 2010. Originally, the taxes were to be paid for three years, generating revenue of HUF 161 billion a year, but a supplement to the 2011 budget targeted revenue from the taxes of HUF 85.5 billion in both 2013 and 2014.

Government officials later said the crisis taxes would be amended after 2012, following talks with the sectors affected

The Széll Kálmán plan will improve the general government balance by HUF 550 billion in 2012 and by HUF 900 billion in both 2013 and 2014, Matolcsy said on Tuesday. Expenditure cuts will account for about four-fifths of the improvement in 2012 and the ratio will fall to three-quarters in 2013 and 2014, he added.