Archive for March 23rd, 2011

Gov’t mulling pros and cons of food VAT cut

The government is examining the pros and cons of whether to cut the rate of value-added tax on some food products, Prime Minister Viktor Orban told a news conference on Tuesday.

Commenting on a report in today’s Nepszabadsag daily that the Agriculture Ministry was proposing a 5 percent VAT rate for basic food products – costing the central budget 240 billion forints – Orban said impact studies would decide the issue.

“The government has not yet made a decision because the various studies which have been carried out point to entirely different outcomes,” Orban said, adding that preparatory work was under way and the experiences of previous VAT cuts would be weighed up.

The paper said the farm ministry had outlined one scenario to cut VAT on pork and poultry products from 25 percent. Another proposal would also include bread and dairy products – now taxed at 18 percent – in the 5 percent bracket. The third would also include eggs and cooking oil.

A positive effect on consumption would help to offset the decline in budget revenue and nudge consumers back towards products sold legitimately, the paper said, without citing any sources.

via Gov’t mulling pros and cons of food VAT cut: Realdeal.hu.

2011
03/23
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Hungary Tax Harmonization With EU Would Slow GDP Growth

Hungary won’t join the European Union’s efforts to harmonize its corporate taxes as that would slow Hungary’s economic growth by up to 0.9%, Prime Minister Viktor Orban said Tuesday.

“Economy ministry calculations show that we would lose gross domestic product growth of 0.5% to 0.9%,” Orban said at a press conference.

Hungary won’t join the EU’s Stability and Growth Pact so that it can keep its corporate tax rate low and thus improve its competitiveness, the Economy Ministry said Monday.

“Economic growth can be boosted in the fastest way by having a competitive tax system and reducing taxes,” Orban said.

Hungary last year lowered its corporate tax rate to 10% for small companies with a maximum annual revenue of 500 million forints ($2.6 million). Its corporate tax rate is 19% for firms with higher annual revenue, but the actual tax rate companies pay is usually lower because of several tax incentives.

The government wanted to lower the corporate tax rate to large companies this year to 10% but postponed that plan in March to meet budget-deficit targets.

via Hungary Tax Harmonization With EU Would Slow GDP Growth – PM Orban.

2011
03/23
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Hungary’s PM Shows Iron Fist Over Airport Name

Hungarian Prime Minister Viktor Orban this week disbanded the committee that opposed his government’s plan to change the name of the international airport in Budapest. From now on, the government will decide on its own what names places of “high public priority” are called. The Committee for Geographical Names, with new members, will decide on the less important names.

The Hungarian government adopted Ferenc Liszt as the patron of the Budapest airport in the district of Ferihegy, dropping the name of the place. It’s a way of celebrating the 200th anniversary of the famous Hungarian composer and pianist known by his German first name Franz. The composer was active when his homeland was part of the Austro-Hungarian monarchy.

“This name will call the world’s attention to the fact that Ferenc Liszt was a Hungarian, or was also a Hungarian,” Geza Szocs, state secretary responsible for culture, said at the re-naming ceremony Wednesday. ”No matter how important it is for Europe to know that Hungarians gave Mr. Liszt to culture, it’s even more important that we Hungarians were given European or, better to say, global a greatness,” he added.

The independent Committee of Geographical Names voted against the new name—Budapest Ferenc Liszt International Airport—and wanted to add the composer’s name to the existing one. Two days after its vote, several of the committee’s members who held public-sector jobs outside the committee were sacked, geography website terinformatika.hu says.

Ferihegy is the name of the place where the airport is located. It was named after a renowned brewer, winemaker and businessman of German origins Ferenc Xaver Mayerffy, who in the 1800s had a farm where the airport now is. ‘Feri,’ a nickname for Ferenc, was glued with ‘hegy,’ a mountain—a somewhat too pompous word to describe 150-meter-high sand dunes in the place that were flattened to enable the construction of the airport in 1940.

The government didn’t explain why it didn’t like “Ferihegy” in the airport’s name.

via Hungary’s PM Shows Iron Fist Over Airport Name – New Europe – WSJ.

2011
03/23
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