1. AmCham acknowledges that the Hungarian economy in general and the public sector in specific is in an extremely difficult position, mainly due to lack of reforms, the absence of clear economic strategy, major overspending of the State and the substantial increase in foreign debt in the past years. Hungary is affected by the global financial crisis AND the effects of local economic mismanagement for years at the same time. Quick and fundamental short and long term decisions are necessary to avoid a major crisis situation. Global and EU developments demand Hungary to keep the budgetary deficit at the pre-agreed level of 3.8% of the GDP. As Hungary has to regain the trust and confidence of the international business community- lost a few years ago- the path for economic decisions is extremely narrow.

2. In the above context the sector specific special "crisis taxes" are truly extraordinary and unorthodox measures. To some extent, they highlight the failure of state regulatory systems in providing an adequate regulatory environment for natural monopolies. AmCham is concerned about the unorthodox nature of the "crisis taxes" and about the way they are being implemented, but understands the extreme and special circumstances from which they derive.

The AmCham would like to emphasis that the “crisis taxes” must be:

- Limited in time - the effective period is maximum 3 years
- Accompanied by structural reforms (public sector, health, education, pensions), starting immediately to put the economy on a sustainable path of growth
- Complemented by effective measures to widen the tax base, thus meaningfully whitening the economy

3. AmCham welcomes the introduction of new personal income tax and corporate income tax regimes and the decision to cap the social security contributions and other similar measures which are in line with the position of AmCham for the past 5 years.

4. AmCham calls upon the government to establish new and effective methods of dialogue with the business community to monitor progress, to avoid further special decisions, to significantly improve the competitiveness of Hungary and to put the country on a sustainable path of growth- in the interest of local and foreign investors, big and small businesses.

We are ready to work with all interested stakeholders to make Hungary the most competitive economy in Central and Eastern Europe and thus to achieve the creation of 1mn new competitive jobs before the end of the decade.

Budapest, 8 November 2010

Board of Governors of AmCham"

Source: AmCham