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Fidesz gov't to introduce family taxation in 2011

Hungary's new Fidesz-controlled government will introduce tax breaks for families with dependent children beginning in 2011, National Economy Minister -designate György Matolcsy said.

Working members of families with children would be able to consolidate their tax returns under a yet to be specified income, Matolcsy said.

Matolcsy said the tax breaks would resemble those granted to families with dependent children in France, starting with one child and increasing to a greater degree with each successive child up to peak at three, in order to encourage population growth among the middle classes, he said.

The minister of national economy-designate noted that families whose income exceeds an unspecified maximum will not be eligible for the tax breaks.

Matolcsy repeated that the government will offer troubled borrowers the option to convert their foreign-currency-denominated loans into forint loans under appropriate conditions. The state fund would offer borrowers the option of purchasing their home and turning it into a lease if they cannot service the converted loan, Matolcsy said, putting the number of troubled families at 300,000.

Matolcsy blamed the government and the central bank for “tolerating and even assisting” the banking system in its provision of foreign-currency loans to the population. The minister of national economy-designate added that the banking system has to participate with funds, expertise and techniques in offering a solution.

Hungarian entrepreneurs need market, credit, capital as well as less bureaucracy and lower taxes, Matolcsy said.

The government will launch energy-efficiency programs through a “green bank”, and they expect 800,000 – 1 million homes a year to be upgraded under the program.

As to provide capital to domestic businesses, Matolcsy recalled an agreement between Fidesz head Viktor Orbán and businessman Sándor Demján on providing half of the yet available HUF 3,000 billion EU funding (in the current EU budgetary period) to SMEs instead of the current 14%, and making loans cheaper through pushing down the central bank base rate, through cutting red tape by a third, and reducing the tax burden by a third in three years. (MTI – Econews)