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Hungarian banks hold out in talks on extraordinary tax

Hungarian Bank Association chief Rezső Nyers has told MTI banks still want to convince the government in talks that an extraordinary tax will have serious effects on the economy.

“There is no alternative to negotiations. The Hungarian Bank Association wants to convince the government that the current size of the bank tax will have severe economic consequences,” Nyers said. It is never too late for a rectification, he added.

The association has been in talks with the government since Prime Minister Viktor Orbán announced the extraordinary financial sector tax -- to generate about HUF 186 billion in budget revenue in 2010 -- early in June. Banks are to pay HUF 120 billion of the tax.

The tax would weaken banks' capital position, making it harder for them to finance lending activities and making borrowing by households and SMEs more difficult, hindering the return of economic growth, Nyers said. (MTI – Econews)