CET ON-LINE 10-MAY-96

Friday, 10 May 1996

Volume 1, Issue 346

Hungarian politicians introduced proposals yesterday which

might cut the nation's highest tax bracket from 48 percent to

4O percent next year. Other proposals include abolishing the

complex double tax rate and giving wage earners a single lump

sum annual tax return.

These measures will certainly be popular with Hungarian

citizens, who pay the highest taxes in the world, but the

government says entreprenuers will get preferential treatment

when it comes to tax breaks. For example, investments will be

at least partially exempt from the payment of social insurance

and personal income tax. However, a tax imposed on savings

interest will be imposed to compensate for the expected drop

in state revenues.