Identifier
Created
Classification
Origin
08BUDAPEST430
2008-04-28 10:11:00
UNCLASSIFIED
Embassy Budapest
how-toVZCZCXYZ0001 PP RUEHWEB DE RUEHUP #0430 1191011 ZNR UUUUU ZZH P 281011Z APR 08 FM AMEMBASSY BUDAPEST TO RUEHC/SECSTATE WASHDC PRIORITY 2861 RUEATRS/DEPT OF TREASURY WASHDC PRIORITY INFO RUEHWR/AMEMBASSY WARSAW 0514
UNCLAS BUDAPEST 000430
SIPDIS
SIPDIS
STATE FOR EUR/NCE MARC NORDBERG
TREASURY FOR XAA HENRY LOUIE AND XLI JESSE EGGERT
E.O. 12958: N/A
TAGS: EFIN PREL HU
SUBJECT: HUNGARY COMMITTED TO TAX TREATY
REF: STATE 38435
UNCLAS BUDAPEST 000430
SIPDIS
SIPDIS
STATE FOR EUR/NCE MARC NORDBERG
TREASURY FOR XAA HENRY LOUIE AND XLI JESSE EGGERT
E.O. 12958: N/A
TAGS: EFIN PREL HU
SUBJECT: HUNGARY COMMITTED TO TAX TREATY
REF: STATE 38435
1. Ministry of Finance State Secretary Almos Kovacs stressed
in a cordial April 23 meeting in response to reftel demarche
that GOH has no currently known substantive disagreement on
specific elements of the U.S.-Hungary tax treaty, and that it
has no desire to delay resumption of negotiations or eventual
signing of a revised tax agreement. Rather, Kovacs
acknowledged very real capacity issues within the Ministry.
Shortly after the February negotiating session, Minister
Veres dedicated the entire tax staff at the Ministry to work
on tax reform proposals.
2. According to Kovacs,"unfortunately for Hungary, but good
for the agreement," tax reform is now off the table in
Hungary in light of a sharp increase in interest rates on
government debt. This will free up the tax staff, which is
planning for a productive July session. In terms of the end
of 2008 deadline, Kovacs said, "we get the message." We plan
to deliver similar messages at other levels of government,
including in a meeting Ambassador Foley has scheduled with
Minister Veres.
3. Comment: The explanation Kovacs offered for the delay
directly correlates with our understanding of the recent
political environment in Hungary. With a governing coalition
on the verge of collapse, political uncertainty will remain a
potentially prominent background feature in these
negotiations. End comment.
Foley
SIPDIS
SIPDIS
STATE FOR EUR/NCE MARC NORDBERG
TREASURY FOR XAA HENRY LOUIE AND XLI JESSE EGGERT
E.O. 12958: N/A
TAGS: EFIN PREL HU
SUBJECT: HUNGARY COMMITTED TO TAX TREATY
REF: STATE 38435
1. Ministry of Finance State Secretary Almos Kovacs stressed
in a cordial April 23 meeting in response to reftel demarche
that GOH has no currently known substantive disagreement on
specific elements of the U.S.-Hungary tax treaty, and that it
has no desire to delay resumption of negotiations or eventual
signing of a revised tax agreement. Rather, Kovacs
acknowledged very real capacity issues within the Ministry.
Shortly after the February negotiating session, Minister
Veres dedicated the entire tax staff at the Ministry to work
on tax reform proposals.
2. According to Kovacs,"unfortunately for Hungary, but good
for the agreement," tax reform is now off the table in
Hungary in light of a sharp increase in interest rates on
government debt. This will free up the tax staff, which is
planning for a productive July session. In terms of the end
of 2008 deadline, Kovacs said, "we get the message." We plan
to deliver similar messages at other levels of government,
including in a meeting Ambassador Foley has scheduled with
Minister Veres.
3. Comment: The explanation Kovacs offered for the delay
directly correlates with our understanding of the recent
political environment in Hungary. With a governing coalition
on the verge of collapse, political uncertainty will remain a
potentially prominent background feature in these
negotiations. End comment.
Foley