Weekly newsletter

Coronavirus: One-off Banking Sector Tax Deductible from Bank Levy, says Finance Minister

MTI-Hungary Today 2020.04.09.

A one-off tax on the banking sector that will bolster Hungary’s pandemic war chest can be deducted in full from the bank levy over the coming five years, Finance Minister Mihály Varga said at a press conference on Thursday.

Varga said the tax, which will raise 55 billion forints (EUR 153m) in revenue, can be seen as a one-off pre-payment of taxes.

Hungary’s banking sector is sound and it had one of its best years ever in 2019, he said. That establishes a proper foundation for the banking sector to share some of the extraordinary burden in the current state of emergency, he added.

The rate of the one-off tax will be 0.19 percent on a tax base over 50 billion forints, Varga said. Payments will be due in three installments, on June 10, September 10 and December 10, he added.

Varga expressed his appreciation for the banking sector’s constructive stand on the matter and said it shows local banks can be counted on not only in years of plenty, but also when the time comes to show solidarity.

Coronavirus – Orbán: Gov’t Suspends Debt Service for Businesses, Individuals

The government has drafted amendments concerning the one-off banking sector tax, he said. It has also approved measures necessary to reduce the negative fiscal impact of the coronavirus pandemic and decided to submit bills on special taxes and levies to improve the budget balance to parliament, he added.

Hungarian Banking Association chairman András Becsei said the banking sector stands together with the whole of society and will pay the one-off tax in addition to the taxes – in the hundreds of billions of forints – it already pays.

In the featured photo: Finance minister Mihály Varga. Photo by Márton Mónus/MTI