UPDATE 1-Hungarian Prime Minister says to extend moratorium on loans and reduce local business tax


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BUDAPEST, December 19 (Reuters) – The Hungarian government will extend the moratorium on loan repayments to households and businesses until July to ease the impact of the coronavirus crisis, Prime Minister Viktor Orban said on Saturday.

Posting on his Facebook page, Orban also said a local tax for small and medium-sized businesses will be halved from early January to help support employment.

This tax will affect the municipalities because the local business tax is a vital source of income for them. Orban said cities with less than 25,000 inhabitants will receive government support, while the financial situation of large municipalities “will be examined one by one.”

The Hungarian government predicts that gross domestic production will decline by around 6% in 2020 due to the pandemic.

Orban said the government will cover two-thirds of the wage costs of businesses in December and January that are to temporarily close in the tourism and hospitality sector, as well as restaurants and private bus companies.

Families with children or who are expecting a child will be able to benefit from a preferential loan of up to 6 million forints and non-repayable grants to renovate their housing, added the Prime Minister.

“We made these decisions … and we hope we can save several hundred thousand jobs,” Orban said.

Nationalist Orban has said he expects Hungary to emerge from the pandemic around April. Vaccinations are expected to start on December 27 or 28.

Orban, in power for a decade, faces tough elections in 2022, battling the effects of the pandemic against an opposition that first united to overthrow him.

Reporting by Krisztina Than; Editing by Alexander Smith and Christina Fincher


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