Hungary Fidesz Will Cut Taxes, Talk With IMF On Deficit Plans This Year
- 27 Apr 2010 4:00 AM
"Hungary’s Fidesz, which won a two-thirds legislative majority on Sunday, will make amendments to tax laws in the course of 2010, but sweeping changes will be implemented only later, said Fidesz President Viktor Orbán on Monday. The next Hungarian Prime Minister told a press conference he was hopeful that Fidesz would be able to agree with the International Monetary Fund (IMF) about a new deficit goal later in the year.
On taxes
Fidesz will not be able to implement a family-friendly tax system already in 2010, Orbán said.
The soonest that could happen is January 2011, he added.
He said it is basically not wise to amend tax laws during the course of the year, but some changes will be needed.
"We need regulations that limit ways of tax evasion," Orbán added. He noted this will not be the ideal tax regime yet, but one that the country needs very urgently. He reiterated that taxes will be lowered already by year-end.
Talks with the IMF
"Neither the IMF, nor the financial leaders of the European Union are our bosses. It would be big trouble if they were," Orbán said, emphasising that "each country is responsible for its own economy."
If a country resorts to external help, it has no choice but to consent with certain terms. Fidesz will also have talks [with international lenders, such as the IMF] but it "does not aim to tame dictates into acceptable proposals," Orbán said.
What Fidesz will strive to put on the table is a good plan for which it can win the counterparties over "as partners and allies". Orbán said he hoped a "favourable agreement" will come out of the talks.
Budget deficit
Asked how large a budget deficit Fidesz would consider acceptable this year and what shortfall it is aiming at, Orbán said his goal is a 0% gap and every other target is merely the outcome of a compromise.
He said Hungary is "up to its neck in debt", and under such circumstances a 0% of GDP deficit is impossible to reach.
"We need a multi-year plan, during which we reduce government debt to a manageable level," he added.
What Fidesz has been saying about the possible shortfall is how large it would be if no changes are implemented to certain regulations. It says that without modifications the budget deficit would be much higher than the 3.8% of GDP official target, Orbán reiterated.
The party’s measures will be aimed reduce the deficit from this hypothetically higher level, he added.
"The question is what could be a realistic goal." He said Fidesz will hopefully come to terms with the IMF on this matter later this year. "
LATEST NEWS IN business