At the same time he added, if a banking tax is introduced in the EU, the Hungarian Government, too, will consider the re-introduction of this tax. Government Spokesperson András Giró-Szász announced, the Government, at its meeting held on Wednesday, approved the new fiscal measures featured in the Széll Kálmán 2.0 Plan, including the introduction of a telecommunication tax, a financial transaction tax and a standardised insurance tax.

With the measures now approved, the deficit of the budget will remain below 3 per cent in the next few years, he added.

No further tax increases are expected in the case of income-type taxes; we have reached the level from which taxes can only come downward, Minister for National Economy György Matolcsy said at the Government Spokesperson’s press conference on Wednesday.

The telecommunication tax will be introduced as of the first of July, according to the Government’s Wednesday decision, György Matolcsy, Minister for National Economy announced at the press conference held after the Cabinet Meeting in Budapest.

The Minister for National Economy said the first 10 minutes will be tax-free, while thereafter a HUF 2 tax will be payable for every minute; private individuals will be required to pay maximum HUF 700, while the upper limit will be HUF 2,500 in the case of businesses.

The financial transaction duty will be 0.1 per cent, and its effect will extend to a range of transactions covering HUF 130 thousand billion from the total annual transactions worth some HUF 600 thousand billion; the central budget will consequently derive a revenue of HUF 130 billion from this tax, Minister for National Economy György Matolcsy said at the Government Spokesperson’s press conference on Wednesday.

Certain large transactions will be exempt from the duty, including, for instance, transfers initiated by the National Bank of Hungary, while the State Treasury, too, will receive exemption from the payment of the duty. Private individuals will not have to pay the duty if they transfer funds to different accounts of their own within the same bank. The Minister indicated, the taxpayer will be the bank which executes the transaction.

The Government approved the Chamber recommendation, based on which fund movements in excess of HUF 5 million between companies should at all times be conducted by transfer, via financial institutions, György Matolcsy said, adding, there will be no such obligation for private individuals.

The Government’s decisions adopted on Wednesday mean that the number of taxes will increase by three and will decrease by six. As a result, there will be 51 types of taxes in the Hungarian taxation system after 1 January 2013, Minister for National Economy György Matolcsy said at the press conference on Wednesday.

He remarked that in June 2010, there were 58 different types of taxes which were reduced to 48, and then last autumn, in the wake of a busy legislative period, the number of taxes increased to 54.

According to the Government’s decision adopted on Wednesday, the telecommunication tax will be introduced as of 1 July, however, it will effectively only enter into force from August, the Minister said at the press conference held in Budapest after the Cabinet Meeting.

He added, consultations are still ongoing, and “there is maximum leeway for discussing the details”. The Minister for National Economy said the first 10 minutes monthly will be tax-free, in excess of which HUF 2 will be payable per minute; private individuals will pay maximum HUF 700, while the upper limit will be HUF 2,500 monthly in the case of businesses.

The tax in question will lie with the relevant telecommunication companies. In answer to a question, György Matolcsy said they do reckon with the possibility that companies will attempt to shift this duty onto consumers, however, due to the keen competition on this market, these attempts will fail.

György Matolcsy expects, by 2013 they will be able to establish a cooperation scheme with the Hungarian banking system by virtue of which the sector may even avoid paying the entire banking tax expected to be collected next year amounting to HUF 60 billion.

The Minister for National Economy said at the press conference on Wednesday if banks extend their lending, they may deduct this from the banking tax; consequently, with an appropriate increase in lending, the banking tax amounting to one half of this year’s HUF 120 billion may even disappear next year. In order to achieve this, banks must engage in more intensive lending and must ensure that both businesses and households have access to credit. This will also stimulate growth, he added.

Source: kormany.hu