Hungarian Prime Minister, Viktor Orbân, has promised to deliver the “largest tax cut in Europe” and the “entire western world”.
“We are building the world’s first family-centred economy,” he said, adding that Hungary will see mothers of one child tax exempt until the age of 30, while mothers of two children will be spared from having to pay income taxes “for life”.
In the run up to next year’s general elections he said that his government would secure “the future of Hungarian families for decades to come.”
He promised to open “a new chapter in the Hungarian economy,”.
X CEO, Elon Musk, praised Orbán saying that the move was a “good idea”.
As Gript previously reported, Orbán -during the annual state of the nation address last month – announced policies from the “Comprehensive Economic Strategy”.
As part of the economic policy, it will be possible for parents’ to deduct from their taxes and contributions 20,000 forints (approx 50 euro) after one child, 80,000 forints (approx 200 euro) after two children and 200,000 forints (approx 500 euro) after three or more children.
Among the proposed moves is also an interest rate cap on housing loans at 5% from April.
A tax exemption for mothers of three children is to take effect from October, with exemptions for mothers of two to be phased in gradually from January next.
At home, Budget 2025 saw the Irish government increase the limit for receipt of the Single Parent Tax Credit of €150 from €1,750 to €1,900.
The band for single parents in receipt of the Single Parent Tax credit was increased from €46,000 to €48,000, while the band for Married couples/civil partners with one income increased from €51,000 to €53,000, with the balance being taxed at 40%.
For married couples/civil partners with two incomes, there was a band increase from €84,000 to €86,000, the balance to be taxed at 40%.
The Hungarian government has acknowledged that the policy represents an enormous expenditure, but Orbán said the cost would be absorbed by an economy that is picking up and that programmes supporting businesses and full employment combined would be able to generate the monies necessary while the deficit of the budget and the sovereign debt would decrease.
He said it is an old dream that parents raising children should not be at a disadvantage financially compared with those who decide not to have children.
“I’m convinced that more children are born if mothers feel financially safe with their children. Had we not introduced the new family support system in 2010, today there would be 200,000 fewer children in Hungary,” he said.
Orban also said a breakthrough was needed in regard to housing while measures are already in place including, family housing benefit plus, village housing benefit, preferential VAT on the purchase of housing properties, and a rural home refurbishment programme.
A 5 percent interest ceiling on housing debts is to take effect from April.
Orban said that these measures would be in vain if inflation was not also brought under control, particularly in relation to food inflation where he noted price hikes among retailers for basic food items.
He recalled that the government had already introduced price curbing measures in the past, including the cap on the prices of foodstuffs, a price monitoring system and mandatory promotions, and meanwhile, they had increased wages. He observed that higher salaries were the best defence against price rises. This is true in general, but is not always enough, and not under all circumstances. Here and now, this is not enough, he stressed.