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Hungarian gov't plans extra tax on drug makers, reduce public transport support

Matolcsy said the tax drug companies pay on subsidized medicines turnover would be raised from 12% to 18%. The government also plans to cut spending on drug subsidies starting 2012, from HUF 343 billion in this year's central budget to HUF 120 billion.

The government will take over MÁV's HUF 300 billion debt, converting it into state debt, which will reduce the need for state support.

The measures are part of a structural reform program, dubbed the Széll Kélmén Plan, unveiled by the government on March 1, and are also included in the updated convergence plan the government is to submit to Brussels on April 15.

Hungary last updated its convergence plan under the previous government in January 2010.