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Hungary headed wrong way in regional tax race

Hungary's tax hikes could deprive its businesses of their competitive edge, taking the country in the wrong direction, the Financial Times said. The paper noted that while Hungary had attracted record foreign direct investment of Euro sum up to € 5.4 billion last year, competition in central and east Europe is heating up. "Poland, the Czech Republic and even Austria have all lowered corporate rates. "Hungary bucked the regional trend when it introduced higher rates of corporate tax." At the same time, the article quoted chief executives who considered the long-term outlook to be of greater importance than short-term tax fixes. In a bid to quell currency weakness, the country's central bank has raised interest rates for the first time in three years. Its newly elected government has promised a package of measures to reduce the ballooning fiscal deficit. Neither move seems likely to do the trick. (MTI, Financial Times)