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Gov't approves measures in action plan

Hungary's government approved at a cabinet meeting on Wednesday a number of measures from the 29-point action plan announced by Prime Minister Viktor Orban early in June.

The government has approved raising the profit threshold for the preferential 10% corporate tax rate from an annual HUF 50 million to HUF 500 million. The profit threshold for the second half of the year will be HUF 250 million.

The government decided to eliminate this year seven of ten small taxes it said earlier it would scrap. The remaining three will be eliminated in 2011. The number of permits required for investments will be lowered from 51 to 33, he said. The government has decided to cap public sector wages at HUF 2 million per month.

The government also decided to introduce an extraordinary 98% personal income tax on severance pay beyond the normal two months wages. The government approved on Wednesday a HUF 120 billion cost-savings package that will freeze material expenditures for things such as vehicles and equipment. Hungarians may distill up to 50 liters of fruit spirits at home free of excise tax.

The government will expand the Széchenyi Card program, which provides companies with a state-subsidized revolving credit line, to cover investment spending up to HUF 50 million, he said. (MTI-Econews)