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Package to help troubled borrowers includes 35% cut of banking tax in 2013-14

The National Economy Ministry and the Hungarian Banking Association agreed to cut the special banking tax by 35% from January 1, 2013 for the year 2013 and another 35% for the year 2014, business website reported on Tuesday.

The deal is part of package of agreements reached between the Hungarian Banking Association and the government on helping troubled fx borrowers, reported, citing the minutes of the agreement it obtained.

The special banking tax payable by the financial sector was introduced at HUF 180 billion a year in 2010. The special tax on the tax would drop to HUF 117 billion for 2013 and to HUF 76.05 billion in 2014 under the agreement, the website reported.

Hungary's updated convergence program, submitted to the European Commission in April 15, projected harmonization of the banking tax with European Union practices from 2013 on after keeping it at an unchanged HUF 180 billion in 2012.

The government earlier planned to be halve the tax to slightly more than HUF 90 billion from the year 2012 on.