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MOL to be main “victim” of Robin Hood tax

Energy producers and distributors/traders will have to pay an extra 8% profit tax next year according to a bill submitted to the Hungarian Parliament by the Finance Ministry.

The tax will be levied on the same base as corporate tax, except for a few modifications, and it will be payable during the years 2009 and 2010.

The text of the bill suggests that the extra tax will be levied on all energy producers and distributors operating on the liberalized part of the market. Consultations on the precise segment of the future tax payers are, however, still going on, according to MTI.

In a Monday interview with the website Socialist MP Tibor Szanyi said that the biggest taxpayer of the new tax will be MOL.

The bill would give Hungary's Energy Office the power to approve future changes in the retail price of district heating - currently the retail price is determined by the local councils. The bill also lists the factors, including costs and a profit, which the retail and wholesale price should contain.

Proceeds from the tax are planned to be used to provide support for energy-savings measures in homes with district heating and for a price subsidy for the most needy among those living in district-heated homes. The bill would authorize the government to set the detailed regulations for these subsidies by a future decree.

The planned Robin Hood tax will be levied on companies who generate more than half of their revenue from energy sales, Finance Minister János Veres said on Monday before submitting the bill.

The tax is expected to generate Ft 30 billion of revenue in 2009, Veres said. This year, the government will take Ft 3 billion out of budget reserves to compensate homeowners for high district heating charges, he added. (MTI – Econews)