Hungary Bank Tax to Stay Europe’s Highest After Cut, Orban SaysGabriella Lovas
Hungary’s banking tax will remain the highest in Europe even after the government honors its pledge to cut the levy, Prime Minister Viktor Orban said on Friday.
The cabinet will monitor if banks expand lending in exchange for the tax cut, though there are no legal requirements for them to do so, Orban said in an interview with public radio station Kossuth. Economy Minister Mihaly Varga said on Tuesday that the special levy will be cut to 0.31 percent of total assets next year from 0.53 percent, and further lowered between 2017 and 2019.
“We will keep our word and will see if the banking sector also keeps its promise,” Orban said.
Orban signed a deal with the European Bank for Reconstruction and Development and Erste Group Bank AG in February to lower the burden that left Hungary’s banking industry unprofitable and curbed lending. He has pledged to mend ties with the sector after a five-year battle that contributed to Hungary’s loss of its investment-grade credit rating.
Shares in OTP Bank Nyrt., Hungary’s largest lender, fell 0.3 percent to 5,800 forint by 9:51 a.m. in Budapest, having advanced 52 percent so far in 2015. The benchmark BUX index rose 0.1 percent, heading for a ninth consecutive week of gains.