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Hungary's Prime Minister Viktor Orban announced plans to rescue the country's economy in parliament on Tuesday.

Orban announced tax cut plans and pledged the streamlining of the tax system. He said his government plans to cut corporate tax from 19 to 10 percent, raising its profit ceiling from 50 million to 500 million forints. The government also plan the introduction of family taxation and a 16 percent flat personal income tax, within the next two years.

Orban said new government would introduce a new banking tax in the next three years. The government expects to raise the central budget tax revenue from banks from 13 billion forints to 200 billion forints.

Orban said state expenditures will be streamlined, making way to savings of 120 billion forints. Measures include setting a monthly salary cap of 2 million forints in the public sector, freezing vehicle, furniture and telecommunications expenditures and regular audits at state-owned institutions with a high level of public funding. The number of boards of directors at state- owned firms will be reduced from one hundred to ten, he added.

Orban said mortgages would be restricted to forint loans, and inheritance tax would be scrapped for close relations.

Orban said the system of absorbing European funding would be changed to considerably favour small and medium-sized companies. Rules for food production, processing and marketing will be eased, he said. Orban, who served as prime minister between 1998 and 2002, was sworn in as Hungary's new prime minister on May 29. His party Fidesz had won a landslide victory with a two-thirds majority in April. (1 U.S. dollar equals to 239.23 forints)

VietNamNet/Xinhuanet