The Hungarian government will double the rate of the transactions services tax introduced in July 2012 to 0.2% from 0.1 % from 1 January 2013, National Economy Minister György Matolcsy announced today when introducing the country’s new austerity package. The expected halving of the rate of the "crisis tax" introduced for banks in 2010 has also been postponed.

The "crisis tax" levied on credit institutions, where the tax base is the corrected balance sheet total, had been set to be halved for 2013 under an agreement between the government and the Hungarian Banking Association. The package, however, now contemplates that the current rate (0.15% of the tax base under HUF 50 billion and 0.53% of the part above HUF 50 billion) will apply also for 2013.

On the one hand, the measures will likely cast doubts on the government's commitment and ability to increase investors' trust and facilitate growth by creating a predictable business environment. On the other hand, today's announcement can also be viewed as the government’s willingness to meet the budgetary targets required by the EU and the IMF and thus address criticism from international institutions.