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BUDAPEST, May 4 (Reuters) - Hungary's parliament on Monday passed the first round of amendments to key tax and pension laws which form the backbone of new Prime Minister Gordon Bajnai's plan to tackle the worst economic crisis for almost two decades.
The legislation will enable the government to introduce spending cuts and tax hikes totalling around 400 billion forints ($1.83 billion) in 2009. The final vote will be held next week.
Here are the main amendments approved on Monday:
* TAXES
-- Value-added tax (VAT) to rise to 25 percent from 20 percent as of July 1.
-- VAT on basic foodstuffs and city heating to be lowered to 18 percent from 20 percent.
* EXPENDITURES
-- Extra month bonus payments paid to pensioners will be eliminated. Starting with a second installment due in 2009, the bonus will be replaced with a "pension premium", conditional upon strong economic growth and the country meeting its budget deficit target.
-- Introduction of a system which limits pension hikes to the rate of inflation as long as GDP growth is below 3 percent.
-- A pension rise due in September to be scrapped.
-- An extra month bonus payment to public sector workers to be eliminated.
-- Sick leave payment to be reduced. (Reporting by Marton Dunai; Editing by Sophie Hares)