Official: Reduced banking tax to encourage lending

Budapest, December 12 (MTI) – The government expects the lowered banking tax to encourage lending activity and thus promote economic growth, an economy ministry state secretary said on Saturday.

Agnes Hornung noted that the tax’s reduction from 0.53 percent to 0.24 percent, as against the originally planned 0.31 percent, from January 2016 was proposed on the basis of informal signals from the European Commission and an agreement with the European Bank for Reconstruction and Development (EBRD).

She said the proposal came after several rounds of negotiations with the EC so that Hungary could honour its agreement with the EBRD on lowering the banking tax in 2016. Hornung said one of the key points in the agreement was for Hungary to continue lowering the levy until it was reduced to “the European average”.

The state secretary noted that 2009 will be used as the benchmark year for total assets in all cases even in 2016. The tax’s lower bracket would remain the same, 0.15 percent up to 50 billion forints.