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Govt plans to phase out crisis taxes, cut bank levy from 2013

The Hungarian government plans to phase out the so-called "crisis taxes" and halve an extraordinary bank levy from 2013, in line with earlier announcements, according to an appendix submitted to the 2012 budget bill on Friday.

The government projects revenue from the crisis taxes levied on companies operating in Hungary's telecommunications, energy and retail sectors to drop to HUF 155bn in 2012 from HUF 161bn this year, then to fall to just HUF 1bn in 2013, and to nil from 2014 on, the appendix containing budget revenue and expenditure projections up to the year 2015 revealed.

The government introduced the sectoral taxes as a temporary measure in 2010. That year, they generated revenue of HUF 151.7bn, about HUF 10bn less than planned.

The European Commission recently said the crisis tax on telecoms was in breach of EU rules, the government said it was ready to defend the tax, even in the European Court if necessary.

The budget bill projects HUF 90bn of annual revenue from the extraordinary bank levy between 2013 and 2015, a little less than half of the HUF 187bn annual target between 2010 and 2012.

The extraordinary bank levy was also introduced last autumn, with retroactive effect for the full year. The levy generated revenue of HUF 182.3bn in its first year.