* Weak growth, job saving plan struck hole in 2013 budget
* Options include higher VAT, keeping bank tax unchanged
* Raising deficit level could curb size of adjustment
BUDAPEST, Oct 4 Hungary's Economy Ministry has
presented the government with a 1 trillion forint ($4.5 billion)
menu of tax rise options and spending cuts to reduce next year's
budget deficit and avert the loss of European Union funds, news
website origo.hu reported.
Central Europe's most indebted nation must keep its deficit
below 3 percent of economic output in 2013 as the alternative,
which would cost it access to some EU development funds, could
strike a further blow to its recession-hit economy.
Hungary's government has made repeated and often
controversial attempts to rein in its chronic fiscal shortfall.
Now seeking a new International Monetary Fund loan to shore up
its finances, it is due to unveil its latest package on Friday.
The Economy Ministry could not immediately comment on the
Thursday report, which said the government could decide on the
final composition of the package by selecting from the menu of
measures laid out by the ministry.
Citing sources close to the government, origo.hu said
measures could include delaying a further cut in personal income
tax planned for next year, or a further rise in Hungary's main
value added tax rate that at 27 percent is already the EU's
Hungary needs to plug an up to 600 billion forint hole in
the 2013 budget, origo.hu said, as a result of lower economic
growth and costs of a social tax reduction programme the
government hopes will save jobs ahead of a 2014 election.
Further items on the list include an extension of Europe's
highest financial sector tax, one of Prime Minister Viktor
Orban's signature unorthodox fiscal measures, at its current
rate next year despite earlier pledges that it would be halved.
Bringing some central bank operations under a new tax on
financial transactions to be launched next year could also curb
the extent of cuts required elsewhere even though this specific
budget item has been criticised by Hungary's potential lenders.
Origo.hu said the size of the required adjustment could be
reduced if Hungary manages to negotiate an increase in next
year's budget deficit target to 2.7-2.8 percent of economic
output from 2.2 percent targeted in the draft 2013 budget.
($1 = 221.95 Hungarian forints)
(Reporting by Gergely Szakacs; Editing by Ruth Pitchford)