Budapest (MTI) – A state guarantee of 60 billion forints (EUR 195m) will be provided to a loan to upgrade Budapest’s third metro line, economy minister Mihaly Varga said on Sunday.

Varga also told commercial channel ATV that the e-toll system would not be extended to include buses and a government decision on this has already been passed.

In connection with proposed tobacco legislation, the minister said that since 2010 the government had taken the standpoint that smoking damages health and carries major social spending costs, and so the cabinet is determined to cut it back. In addition, the European Union requires that the amount of the tax should approach the European average from year to year. If the change to the tobacco tax affects bigger players to a larger extent then “I can accept that,” he added.

On the subject of the tax on advertisements, Varga said he did not see anything wrong with the hike, “given that if someone dominates the market and makes a profit on the vast majority of the revenues generated there, then we have decided correctly in this matter.” He added that the reason for the tax hike on adverts was down to the need for budget revenues which would be turned towards important social, health-care and educational goals.

Asked in the interview why there was a need for extra revenues when the Hungarian economy is stable, Varga said: “There are debts that must be repaid and the public debt — compared with neighbouring countries — is still too high, and besides which there are tasks, too, which we have been able to provide support for only to a lesser extent.” He noted as an example the cabinet decision on providing greater support for public transport in the capital.

In connection with a newspaper article suggesting that the tax office (NAV) chief had been a silent partner in a “phantom company” until the firm was wound up in 2011, Varga said he had phoned up Ildiko Vida concerning the matter. Vida told him that she had indeed been a silent partner in the company in question, which had operated for around a year, but thereafter there was no revenue or expenditure after which tax should have been paid. Varga added that he had asked Vida to provide a written memo concerning the matter, since it is an “especially sensitive time” to be running the tax office, which is “under attack both from the outside and inside”.

He said attacks on the tax office were not really directed at the office but at the Hungarian state institutions and the budget. Varga insisted that the NAV saw to its duties with integrity and tax revenues were flowing in at the appropriate rate.

Photo: Daily News Hungary


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