The government submitted the first draft of its 2013 budget bill to Parliament last Friday. The proposal targets a deficit of HUF 686.5 billion (EUR 2.41 billion), equivalent to just 2.2 per cent of projected GDP. This would mean a primary budget surplus (that is, excluding the cost of servicing existing debts) of two per cent. The bill sees government debt fall to 76.8 per cent of GDP by the end of next year, using EU accounting standards.
With the government showing no sign of U-turning on its flagship “flat tax” policy, where income tax is 16 per cent for all wage earners regardless of salary, a pot pourri of measures has been introduced to fill the hole it blew in the budget when introduced last year. The 2013 budget reflects the continued shift toward taxing consumption exemplified by the EU’s highest rate of VAT at 27 per cent. Additional revenue raisers in the budget include:
– HUF 130 billion (EUR 454.92 million) – new financial transaction tax
– HUF 44 billion (EUR 153.86 million) – from a two forint per minute tax on phone calls and text messages, to be introduced in July this year
– HUF 40 billion (EUR 139.87 million) – increase from eight to 11 per cent in “Robin Hood” tax on energy companies, and extension to other utilities
– HUF 62.5 billion (EUR 218.48 million) – new tax on insurance products