Hungary will increase its top rate of value added tax (VAT) to 27 per cent in a bid to cut the budget deficit to 2.5 per cent next year, Economy Minister Gyorgy Matolcsy said Friday according to dpa. The move would raise a fifth of the 750 billion forints (3.63 billion dollars) by which Hungary hopes to cut its budget deficit in 2012, Matolcsy was quoted as saying by the state news agency MTI. Payroll contributions will also be hiked, and there will be a clamp down on tax evasion, the minister told reporters. After disappointing second-quarter growth figures, Hungary has already had to take urgent measures in a bid to stay on course for this year's deficit target of under 3 per cent of gross domestic product (GDP). The government is basing its calculations for 2012 on a meagre economic growth forecast of just 1.5 per cent.
