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Hungary to scrap transaction tax on central bank

BUDAPEST, Oct 5 (Reuters) - Hungary will scrap a tax on transactions conducted by the central bank and will offset the revenue loss by raising the tax on state treasury transactions and cash withdrawals from banks, the economy minister said on Friday.

The transaction tax was a key sticking point in credit talks with the International Monetary Fund and the European Union.

Gyorgy Matolcsy also told a news conference that the government expected 120 billion forints worth of extra revenues as a result of tightening tax collection, and 51 billion forints from abolishing a ceiling on social security contributions which will affect higher income earners.

(Reporting by Gergely Szakacs and Krisztina Than)

((gergely.szakacs@thomsonreuters.com)(+36 1 327 4748)(Reuters Messaging: gergely.szakacs.thomsonreuters.com@reuters.net))

Keywords: HUNGARY BUDGET/2013