"Hungary will implement some simpler modifications to its tax regime as of January 2008 and major adjustments to the system that require wide-scale preparations are to enter into force as of January 2009, the Finance Ministry has announced on Monday.The correctional measures, the details of which are to be finalised by 30 September, will not affect the macroeconomic path laid down in the Convergence Programme, Miklós Tátrai, secretary of state at the Finance Ministry, told a press conference.
Tátrai said the property tax, which will be strictly value-based, would be levied by local governments using a unified methodology.
A smaller budget balance (the result of higher-than-expected revenues and/or smaller-than-expected expenditure) will be used to further cut the deficit and to improve competitiveness, Tátrai added.
In 2006, property-linked revenues of local governments amounted to HUF 65 billion.
The new property tax will replace 4+1 property-linked taxes. Tátrai said the government was not opposing to levy the new tax on real estate worth more than HUF 50 million.
To Portfolio.hu's question Tátrai confirmed that it would be the task of local governments to decide on tax rates, allowances and exemptions. To our other question whether the tax would be applicable on commercial property as well, he said “non-residential real estate will not be exempt, as they are not now, either."
Hungary's senior coalition Socialist Party (MSZP) and its junior ally, the Free Democrats (SZDSZ) on Sunday signed an amendment to the coalition agreement focused on fine-tuning reforms.
After signing the document Prime Minister Ferenc Gyurcsány said the agreement defined a clear programme for reforms in the next one or two years.
The text of the 26-page amendment document have been posted on the two parties' as well as the government's website.
The health-care reform bill is planned to be submitted to Parliament in the autumn.
A compromise on health-care reform plans has been sealed, geared towards raising quality standards by introducing competition and private capital into its financing system, Economics Minister of the liberals, János Kóka said."
Source:
Portfolio Online Financial Journal
03.07.2007