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PM says that preferential corporate-tax rate-ceiling to be raised on September 1

Prime Minister Viktor Orbán said on a television program on Tuesday evening that the government would raise the ceiling for the preferential 10% corporate-tax rate to annual profit of HUF 500 million (€1.78 million) from the current HUF 50 million on September 1.

The corporate-tax rate for companies posting annual profit of more than HUF 500 million continues to be 19%.

Orbán said the government would introduce Hungary's new 16% flat-rate personal-income tax gradually over a two-year period beginning on January 1, 2011.

The prime minister added that the government would also abolish 10 taxes currently imposed on small- and medium-size businesses on September 1 if parliament can pass the necessary legislation this summer.

With regard to the government's planned HUF 187 billion increase in taxes imposed on banks and insurance companies, Orbán declared that “We will negotiate with the banking sector, though not with regard to the amount.”

The prime minister said that the government would implement a 15% reduction in the aggregate wages paid to public-sector employees “tomorrow morning with only slight exaggeration.”

Orbán said the government would make the minimum wage subject to taxation within one or two years.

The prime minister reiterated that his government intends to meet this year's deficit target of 3.8% of GDP.

Orbán said that the government would submit proposed amendments to Hungary's budget law to parliament within days.

The prime minister made his television appearance after outlining the Fidesz-led government's 29-point economic-action plan in parliament earlier on Tuesday. (MTI-Econews)