Fidesz Does Not Like 'Robin Hood'

He added that the proposed tax changes would not decrease the families' burden considerably, as the cabinet claims they would.

After due evaluation of the government's tax proposals, Varga said the measures would not alleviate burdens of families. Moreover, considering the outlook on inflation, a further rise in food and energy prices, their burdens would even increase, he added.

The former finance minister noted that tax hikes for businesses would hamper growth, adding that “there is nothing (in the proposals) we should expect faster growth from".

Prime Minister Ferenc Gyurcsány expects the proposed measures to fight the grey and black economies, and his part greatly leans on the whitening of the economy as a source for the tax cuts. Meanwhile, Varga said the 10 percentage point raise of the excise tax would definitely not help combat the black economy.

He also said that the planned 8% special ‘Robin Hood' tax on energy companies (aimed at creating a source for subsidies for the lowest-income families in district heating homes) would also fail to reduce families' burdens, as the service providers already announced they would pass their increased costs down onto the consumers, just like banks did when a special banking tax was introduced two years ago.

Fidesz continues to support a VAT cut and will submit this proposal to Parliament in the autumn session. Varga said several Socialist MPs are in favour of this idea and the opposition party did not give up its plan to convince the MSZP of the viability of its plan."

Source: Portfolio Online Financial Journal