TO help Hungary emerge from the economic crisis, the Parliament has approved the levy of a controversial “crisis tax” against telecom, energy companies and retail chains, stated to be the strongest participants in the economy. The crisis tax, part of an economic plan to control the budget deficit and restore growth, is to be levied for a period of three years. The measure is expected to generate more than US $ 800 million (161 billion Forints).

According to the government, taxpayers had covered the costs of the economic downturn to keep business interests afloat, now it was time for business to bear the brunt of the economic burden. The government's economic plan also includes cuts in government spending and introduction of job sharing for women and income tax reforms, which would essentially consist of a 16 percent flat tax, the lowest in 20 years, with major deductions allowed for children.

The crisis tax, which has come under severe attack, may be incompatible with EU rules, which only allow taxes by member states to cover the cost of regulation. The European Commission had recently started proceedings against France and Spain that levied extraordinary taxes on telecom companies to compensate for a fall in advertising revenue.