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Matolcsy proposes higher VAT on luxury goods to EU

Hungarian economy minister György Matolcsy has proposed to the EU's tax commissioner Algirdas Semeta that the European Commission should allow a higher value added tax (VAT) on luxury goods, the Economy Ministry said on Wednesday.

The ministry's statement said Matolcsy said in his letter to the tax commissioner that the Hungarian government would consider the possibility of introducing a 35% VAT rate on certain products if the EU allowed it.

Top VAT rate which covers the vast majority of products is 25% in Hungary.