Fidesz group to take position on simplified business tax on Monday

Budapest, November 4 (MTI) - The parliamentary group of governing Fidesz will take a position on the future of the simplified business tax on Monday, the group s press department said on Friday.

The group will take positions on all amendments submitted to the government s tax bill on Monday, including a proposal to eliminate the simplified business tax, also known by its Hungarian acronym "eva".

The parliamentary group will submit its positions to the government, which is expected to compile the changes it supports on November 10.

Government spokesman Andras Giro-Szasz said at a press conference on Thursday that the government supported a proposal by National Economy Minister Gyorgy Matolcsy to eliminate eva from the start of next year. However, Parliament s Audit and Budget Committee on Wednesday rejected a bill by Fidesz MP Laszlo Koszorus to scrap the tax.

Fidesz group leader Janos Lazar also said earlier in the week that he was against scrapping eva.

Fidesz spokeswoman Gabriella Selmeczi said on Friday that by Monday Fidesz would take into consideration all the arguments going for and against eva.

Answering a question whether the majority of the group would vote against the government s proposal, the deputy said that Fidesz was an "open party" and "everything is possible". She added that Fidesz would like to have a very simple tax system and "the eva has obviously had its advantages, but we can also understand that if the tax system is getting simpler as a whole and therefore this target is fulfilled, then certain issues can be raised against the eva," Selmeczi said.

Business daily Napi Gazdasag said on Friday that central budget revenues will drop by about 10 billion forints if the current eva is eliminated next year.

According to the paper s calculations, if eva is scrapped next year as proposed by the government, then current eva-paying companies will transfer 118 billion forints in value-added tax and 47 billion forints in business tax instead of 179 billion forints in eva. This calculation is based on the assumption that the former eva companies will not deduct any expenses from their tax base. If they do, that will further reduce tax revenues, the daily said.

In the first nine months of this year, companies paying eva contributed an average 900,000 forints to the central budget in advance tax payments, while companies paying regular business tax transferred 400,000 forints each, the paper said.

Last year, the 100,000 eva companies paid a total 182 billion forints in simplified business tax, while the 340,000 non eva-paying companies transferred 323 billion forints in business tax.

In the simplified system, companies that opt for eva cannot deduct any costs from their tax base and pay 30 percent of gross revenue as business tax.