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Gov't submits proposal of exempts from tax

The government has submitted through parliament's financial committee a proposal that Fidesz MP Antal Rogán tendered earlier this week, though will withdraw, exempting insurance companies that acquired licenses after June 1, 2007 from the government's extraordinary financial-sector tax, the news portal index.hu reported on Friday morning.

Rogán, who serves as the chairman of parliament's economic committee, told the website he decided to withdraw the bill after discovering that his proposed exemption would affect only a few companies, several of them owned by shareholders considered to be close to the governing Fidesz.

Rogán presented the amendment to the government's proposed extraordinary financial-sector tax, which Minister of National Economy submitted to parliament last Friday, on the grounds that insurance companies founded in the past three years need the exemption in order to remain financially viable, thus ensuring that Hungary's insurance market will remain sufficiently competitive.

There are six insurers on the market that would qualify for the exemption. One of them is CIG Közép-európai Biztosító, whose founders include former central bank governor Zsigmond Járai, who was finance minister in the previous Fidesz government, and current foreign minister János Martonyi. Wabard Biztosító was recently founded by businessman György Waberer, who is thought to be close to Fidesz, Index.hu wrote.

The four other companies that would be exempt from the financial-sector tax would be ERGO Életbiztosító, Genertel Biztosító, MKB Általános Biztosító and MKB Életbiztosító.

Index.hu said the government's proposed amendment to the extraordinary financial-sector tax includes one of Rogán's other proposed amendment which would stipulates that the tax on insurance companies be fixed at 10% of revenue stemming from one-off life insurance and ad hoc premiums. The website noted that CIG life insurance arm CIG Pannonia generates approximately half of its revenue from such premiums and would thus stand to benefit from this modification. (MTI-ECONEWS)