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Planned tax measures cut budget gap this year

Hungary's Fiscal Council, an independent body established to review budget laws in 2008, calculates that tax measures planned by the new government will moderately improve the central budget primary balance - cut the budget gap - this year. The measures, currently being discussed by Parliament, will, however, have the opposite effect in 2011-2014.

The planned amendments will improve the primary balance by HUF 82.5 billion this year, as the HUF 153.3 billion the Fiscal Council expects to be collected from an extraordinary financial-sector tax will more than offset the revenue shortfall resulting from all the other tax changes, the council's calculations show.

The amendments will, however, reduce the primary surplus by around HUF 200 billion in the four years ahead, the council said.

In 2011 adverse effect could be less, just HUF 12.5 billion taking into account the HUF 200 billion the government plans to collect from the extraordinary financial sector tax next year. (MTI-ECONEWS)