Hungarian Prime Minister Péter Magyar has unveiled a proposed budget for 2027, aiming for a deficit target of 4.9% of the gross domestic product (GDP). The budget plan introduces significant alterations in taxation and government spending, with a focus on social benefits, public-sector salaries, and healthcare funding. Following the announcement, Hungary’s currency, the forint, saw a strengthening, although this may be temporary.
Key elements of the proposal include a doubling of family allowances and an increase in the minimum monthly pension from 28,500 forints to 120,000 forints. The budget also retains the 13th-month pension and introduces the first weekly payment of a 14th-month pension. Public-sector employees are set to benefit from a 677 billion forint allocation for salary increases, affecting more than 600,000 workers. Additionally, 510 billion forints are earmarked for healthcare improvements, and local governments will receive an additional 64 billion forints.
Tax changes are a significant aspect of the budget, with personal income tax rates set to decrease from 15% to 9% for earnings up to the minimum wage starting January 1. However, the budget proposes new restrictions on tax exemptions for mothers, introducing an income ceiling of one million forints per month and excluding some mothers over 40 with two children from certain benefits.
To fund these initiatives, the government plans to save 1,500 billion forints, implement a 200 billion forint wealth tax, and increase the corporate tax rate from 9% to 11% for companies with annual revenues over 180 billion forints. Additional savings of 246 billion forints are anticipated from concession fees.
The budget proposal has attracted criticism from Fidesz politician Balázs Orbán, who argues that the new restrictions could undermine existing family tax benefits. He contends that mothers over 40 with two children might lose their planned full income tax exemption, while younger mothers earning above the specified threshold could face taxation on income above that limit. Orbán further suggested that these restrictions were introduced at the behest of Brussels.