New regulation enables some 40 percent of Hungarian banks to pay less tax, as this Government incentive leaves altogether HUF 10bn at active lenders, Minister for National Economy Mihály Varga told economic daily Napi Gazdaság.

According to the amendment submitted as part of the tax package for the 2016 Budget Bill, lenders with a higher stock of corporate loans compared to 2009 are entitled to reduce their tax base. Later, he added, lenders that boost their corporate lending activity in the future could also benefit from the incentive.

The article points out that the amount of HUF 10bn per year is projected to remain the same in the coming years as bonus for active lenders.

Speaking of the expected impact of the measure, the Minister said the amount of HUF 10bn is seen to have a multiplier effect on the economy. The amount deductible from tax will be proportionate with the bank’s stock of corporate loans. This is expected to generate lending competition and after a while the resources channelled into the economy will far exceed the amount of tax revenue loss, Mihály Varga explained.

(Ministry for National Economy)