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Hungary Confirms Tax Rise Plans

by Lorys Charalambous,, Cyprus

21 June 2013

Hungary's Minister for National Economy, Mihály Varga, has confirmed several tax increases, including hikes on financial transactions.

Varga had warned of possible tax rises last month, should measures designed to facilitate Hungary's exit from the Excessive Deficit Procedure prove insufficient. The Government is now planning to increase the Financial Transaction Tax from the current rate of 0.3 percent up to 0.6 percent for cash withdrawals, and to abolish the current HUF6,000 (USD27.34) cap on the amount payable. Further, the tax payable on money transfers will increase from 0.2 percent to 0.3 percent, although in this case the HUF6,000 cap will remain in place. Varga envisions that the banks will choose to bear the extra costs themselves, due to competition in the sector, and he stated that the increases have the support of the Hungarian Banking Association

Meanwhile, a telecom tax paid by businesses only will rise by HUF1 (USD0.004) per minute or per text message, and the upper limit payable will rise from HUF2,500 (USD11.39) to HUF5,000 (USD22.78); mining fees will increase from 12 percent to 16 percent; and a healthcare levy of 6 percent will be payable on income from interest. Varga added that no decision had been taken on a proposed advertising tax, although expected revenues from the tax would be included in the Budget Act amendment.

Provided that the tax increases are agreed by the National Assembly, they will come into force from August 1.

TAGS: tax | Hungary | mining | banking | financial services | tobin tax | Health tax | legislation | tax rates | revenue statistics | telecoms | inflation | services

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