Hungarians keep more cash to avoid transaction fee and other taxes

Budapest, March 5 (MTI) – Hungarians kept a record amount of cash at the end of last year, which analysts say is likely to be linked to the avoidance of the bank transaction fee and other types of tax, business daily Vilaggazdasag said today.  

According to preliminary data from the central bank of Hungary, cash holdings came to 2.6 trillion forints (EUR 8.4bn) at the end of 2013, up 11 percent on 2012. Money held in bank accounts totalled 2.3 trillion forints, up 18 percent on the previous year. Money kept in current accounts exceeded funds in high-interest deposits, the paper said.

Analysts told Vilaggazdasag that the introduction of the transaction fee last year may be the reason while people are keeping more cash. Another reason may be the low interest rates on savings, which are also subject to 16 percent personal income tax and 6 percent health-care tax since August last year. Another incentive to hoarding cash is the new rule on allowing two ATM cash withdrawals free of charge a month, up to 150,000 forints (EUR 482), the paper said.

Photo: www.nlcafe.hu

Source: http://mtva.hu/hu/hungary-matters