Hungarian Prime Minister Péter Magyar has unveiled the country’s proposed budget for 2027, aiming at a deficit target of 4.9% of the gross domestic product (GDP). The budget proposal includes significant changes to social benefits, public-sector salaries, healthcare funding, and tax policies. Following the announcement, Hungary’s currency, the forint, experienced a temporary strengthening.
The proposed budget plans to double family allowances and increase the minimum monthly pension from 28,500 forints to 120,000 forints. Additionally, the 13th-month pension payment will continue, along with the introduction of the first weekly payment of a 14th-month pension. Public-sector employees are set to receive salary increases totaling 677 billion forints, benefiting over 600,000 workers. Healthcare funding is slated to receive an additional 510 billion forints, while municipal budgets would see an increase of 64 billion forints.
Changes to the tax system are also a key component of the budget plan. The personal income tax rate is proposed to decrease from 15% to 9% on earnings up to the minimum wage starting January 1. However, modifications to tax exemptions for mothers include the introduction of a monthly income ceiling of one million forints and the exclusion of certain mothers over 40 with two children from these benefits.
To offset the budgetary expenses, the government plans to save 1,500 billion forints and introduce a new wealth tax expected to collect 200 billion forints. Additionally, the corporate tax rate for companies with annual revenue over 180 billion forints would rise from 9% to 11%. Savings from concession fees are projected to add another 246 billion forints to the budget.
The budget proposal has faced criticism, notably from Fidesz politician Balázs Orbán, who contends that the proposed restrictions could weaken existing family tax benefits. Orbán argues that mothers over 40 with two children may lose their full income tax exemption, and younger mothers earning above the specified threshold could face taxation on income exceeding that limit. He also suggested that these restrictions have been introduced at the behest of Brussels.