FACTBOX-Hungary’s 2010 tax bill awaiting parlt vote

July 22 (BestGrowthStock) – Hungary’s parliament is expected to pass
the centre-right Fidesz government’s 2010 tax reform package
later on Thursday, including a 187 billion forint ($834 million)
new financial sector tax designed to bring the budget deficit
under control.

For main story on how Hungary plans to cut its deficit to
3.8 percent of GDP this year and negotiate a long-term plan with
the European Union on further measures beyond 2010, see
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Following are the key measures in the new bill which will be
voted on later on Thursday.

* A financial sector tax to be paid in two instalments, by
Sept. 10 and Dec. 10. Banks will have to pay a 0.5 percent tax
on their 2009 balance sheet totals, above 50 billion forints,
while the tax rate on the portion below that level is 0.15
percent. Insurance companies will be required to pay 6.2 percent
after their adjusted income.

* The government wants to collect 200 billion forints from
the same tax in 2011 as well. The law also provides for the
financial sector tax to be levied in 2012 but it does not
specify any details on its payment then.

* The issuance of new foreign currency (Read more about trading foreign currency. mortgages to
households will be banned.

* Public sector pay will be limited at 2 million forints per
month and the measure will also apply to the central bank and
financial markets regulator PSZAF. The planned pay cut at the
central bank has been criticised by the European Central Bank.
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* The corporate tax rate will be cut to 10 percent from 19
percent on income below 500 million forints as of July 1.

* A 98 percent tax on public sector bonuses above 2 million
forints ($8,924) on income earned after Jan. 1.

* A luxury tax on boats, jets and expensive cars will be
abolished as of July 1.

* Fiscal supervisors will oversee the use of public funds at
ministries, budgetary institutions and independent government
funds and initiate the suspension of payments, if necessary.

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(Compiled by Gergely Szakacs)

FACTBOX-Hungary’s 2010 tax bill awaiting parlt vote