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New local govt funding rules will make big savings, says official

By shifting to task-based local government financing, Hungary's central budget could save up to an annual HUF 1,000 billion, a third of total financing, state secretary for local government affairs András Tállai told business daily Napi Gazdaság.

A bill to be submitted to parliament in the autumn will establish which frontline services local governments will be responsible for, Tállai said. The plans call for a mix of regulation in some areas and deregulation in others, and involve functions ranging from public administration to education, he said.

Tállai said the central government would also tighten up controls on the legal compliance of local authorities.

All local governments could be obliged to levy a business tax on companies operating in their area, with the minimum rate set centrally, he added.