The property tax and the wealth tax could be put on the table at talks with the International Monetary Fund but Hungary will not yield ground in these, Hungary’s chief negotiator for the IMF/EU talks said on Friday.
Speaking to commercial television channel TV2, Mihaly Varga said that they will call the IMF’s attention to earlier rulings of the constitutional court. “A levy like a property tax in Hungary can not be introduced currently because the preconditions for it are not there”. He added that the constitutional court had earlier ruled in the matter.
Concerning the 16 percent flat-rate tax, Varga said that it would be in place in a “pure form” for the first time from 2013. He added that the government would ask the IMF to wait and see what this system could achieve.
He said that the economic crisis would not last forever and [after that] the Hungarian tax system will be able to accelerate economic growth and create more jobs.
He reiterated that Hungary would ask for a precautionary loan. Hungary can finance itself and does not need external financing but given the European economy’s current situation, it cannot be foreseen whether this will change or not, he said. Varga added that the deal could be sealed in the autumn.
A property tax would not serve Hungary’s interest or contribute towards making full use of the country’s potential, Prime Minister Viktor Orban said earlier in the week.
The IMF will start talks with Hungary on Tuesday next week on a stand-by agreement (SBA), the fund’s director of external relations, Gerry Rice said on Thursday.