Transaction tax to benefit people, curb speculation, says PM

Budapest, May 11 (MTI) – The proposed tax on financial transaction will be beneficial to residents while curbing speculation, Prime Minister Viktor Orban said on public radio Kossuth on Friday morning.

The government plans to spend the revenue from the tax on cutting tax on labour, Orban said.

 

Asked whether the new taxes introduced by the government on Wednesday were replacing old sectoral crisis taxes and making them permanent, Orban said if they were, it could be regarded as an enormous achievement from Hungary’s point of view.

 

The government announced it would eliminate the banking tax and other sectoral “crisis” taxes in 2014, but introduce a tax on telephone charges, financial transactions and certain types of insurance, as well as raising a tax for energy and utility companies from 2013. Analysts have suggested that the new taxes were in fact the same as the old crisis taxes, only made permanent instead of phased out by 2014, as earlier planned.

 

“It is a great success for Hungary if it manages to make permanent a temporary contribution from banks, capital investors and multinational companies to a fair tax system,” he said.

 

“If we have done it once why couldn’t we do it in the upcoming period, too?” he said.

 

Orban insisted that the new system would be beneficial for people and hurt speculation. He said that speculators who transfer millions or billions of forints will pay much more in transaction tax than the average person.

 

Regarding European economic policy and the results of French and Greek elections last week, Orban said Europe now understands that it is not possible to provide a predictable living from credit and debt on the long term. The policy of debt-reduction cannot be changed otherwise “there will be big trouble”, he said, adding however that the fight against debt cannot be as obstinately pursued as it had been by some over the past two years.

 

Hungary cannot be recommended to pursue an economic policy which would raise public debt, he said.

 

Hungary will recommend faster absorption of European Union funding in order to accelerate economic growth, boosting support for the agriculture and food industry. The Hungarian government feels this is a good time to achieve changes on a larger scale in European policy, “as if some fresh air had entered the room”.

 

Orban said the example of Greece shows that the practice failed in which “international forces binding together – call them anything, big capital, IMF or EU – could overwrite the rules of democracy”. People will not accept this, he said, adding that the politics where a technocrat prime minister and government comes in if big capital objects to governance had been toppled.

 

Asked about the relationship between opening towards the east and the west in politics, Orban said it was not “either-or” but “and”.








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