Focusing on the provisions for a gradual phasing out of the crisis taxes levied on the country’s telecommunications, energy and retail sectors since 2010, the Hungarian Economy Ministry has recently submitted 2012 budget bill to the parliament. The extraordinary bank levy imposed on financial institutes in Hungary from last year has also been proposed to be halving between 2013 and 2015.
In response to the European Commission’s request to abolish the tax on telecoms operators, as the Commission thinks the tax is illegal under European Union (EU) telecoms rules, as revenue from the taxes is used for the government’s central budget and not for meeting the specific costs of regulating the telecoms sector, the government of Hungary has now confirmed plans to gradually phase out the tax by 2014.
The Hungarian government introduced a new special tax on three sectors of its economy in October 2010, retail commerce, electronic communications and energy to boost state revenues. The scope and rate of the tax is defined individually per industry and the tax is expected to generate annual revenue of around EUR220m (USD290m). Hungary’s 2012 budget bill is based on gross domestic product growth (GDP) of 1.5% in 2012, 2.9% in 2013, 3.1% in 2014 and 3% in 2015.
