Budapest, April 15 (MTI) – The government will cut the banking tax by 20 billion forints (EUR 64m) in 2017, economy minister Mihály Varga said at an annual meeting of OTP Bank on Friday.

The government plans to close the sale of the state-owned stake in Budapest Bank by the end of this year and the purchase of a 15 percent stake in Erste Bank by June 30, the minister said.

Varga also said the government is considering incentives to boost the number of POS terminals in order to cut back the amount of cash in circulation.

The government has decided to use additional fiscal revenue from the growing economy to reduce public debt, raise public sector wages further and cut taxes, as it is doing next year with the VAT rates on a number of staples, he said. It will also continue investments in the cultural, health-care and energy sectors as well as boost funding for a home purchase subsidy scheme by 100 billion forints.

Varga noted that economic growth in Hungary is increasingly being supported by the pickup in domestic consumption, in which higher lending plays an important role. Last year, new retail outlays of the banking sector rose by 34 percent to 690 billion forints, he added.


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