BUDAPEST: Hungary's economy ministry denied on Tuesday it had agreed to cut a special tax on the financial sector designed to help trim its budget gap by 35 percent in 2013 and a further 35 percent in 2014.
"There has been no agreement between the Economy Ministry and the Bank Association," the ministry said in a brief statement.
Business website mfor.hu earlier said the government and banks had agreed to a deal, which it said also covered other elements.
In an effort to plug a big hole in its budget, the government last year levied a special tax on the financial sector which it said it would maintain at the current level of an annual 187 billion forints ($1.03 billion) until 2012.
Under the agreement, the government would also end a moratorium on evicting non-paying mortgage borrowers in exchange for a series of measures designed to cushion the blow of meeting higher payments, the website said.
Hungarian households took on trillions of forints worth of foreign currency debt during a boom prior to the 2008 crisis, mainly in Swiss francs, and many are struggling with surging monthly payments.
Hungary's government pledged to protect borrowers in difficulties and banned evictions last year amid a spike in delinquent loans as the franc rose while unemployment neared 17-year highs.
At the end of last year, 9.3 percent of all outstanding loans were more than 90 days overdue, according to financial markets watchdog PSZAF.
Under the terms of the deal, banks will be allowed to liquidate assets backing up to 5 percent of troubled loans each quarter, mfor.hu said.
Borrowers will have the option of fixing their monthly payments on Swiss franc denominated loans at 190 forints per franc, and place differences stemming from higher market rates into a separate forint-denominated loan account, guaranteed by the state for 3-1/2 years.
The Hungarian forint traded at 206.45 to the Swiss franc at 1000 GMT on Tuesday.
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