Something you won’t read in mainstream international media: Eurostat found that Hungary leads the EU in terms of tax cuts

Hungary has been featured in the left-leaning international media quite frequently in recent weeks. These outlets will do whatever they can to highlight their criticism of our policies, but fail to report on the results we deliver. Taxation is an area where the mainstream media’s disregard for unbiased reporting becomes the most obvious.

Recently, Eurostat, the European Union’s statistics bureau, found that Hungary has cut taxes on wages and salaries by the largest amount in the last decade within the EU.

According to Eurostat, Hungary's tax wedge on average wages fell by 9.5 percentage points between 2009 and 2020; meanwhile, Romania saw the next biggest decrease, at 6.1 percentage points, and Portugal saw the biggest increase, at 5.0 percentage points. And that does not include this year’s hefty, HUF 600 billion reduction in employer taxes.


When it comes to the change in tax deductions as a share of GDP, in the same 2009-2020 period, Hungary’s figure stands at -2.5 percent, the third best result in the bloc, compared to an average EU-wide increase of 2.1 percent.


That’s impressive. But what exactly changed since 2009? Let’s recap.

Compared to 2009, PM Orbán’s governments have not only reduced the personal income tax (PIT) in Hungary from 36 percent to 15 percent, but also, beginning January 1, young Hungarians under the age of 25 and women with four or more children no longer pay a single forint of PIT. While families received HUF 12 billion in tax discounts in 2009, the same figure for 2022 will stand at a staggering HUF 980 billion. On top of this, as they were hit hardest by the economic fallback triggered by the coronavirus pandemic, Hungarian families with kids will be reimbursed for the entire amount of PIT paid in 2021, up to the level of the average wage.

Meanwhile, the government has eased taxes for employers, too: Hungary currently has one of the lowest corporate taxes in Europe at only 9 percent, and employers’ taxes have also seen a drastic reduction from around 33.5 percent under the Socialist government, to 15 percent in 2022. A simplified contribution to public revenues, commonly known by its Hungarian acronym of EKHO, decreased from 20 percent to 13 percent in the same period.

This year, the upper annual revenue limit for those with VAT-exempt status by subjective right (alanyi adómentesség) stands at HUF 12 million, compared to only HUF 5 million in 2009. Among the many other tax reductions, PM Orbán’s governments have also reduced tax deductions from the wages of working pensioners from 49.5 percent to 15 percent.

Moreover, the combination of tax reductions for workers, employers and entrepreneurs has resulted in a significant drop in VAT tax evasion from 22.3 percent in 2010 to just 6.1 percent in 2020.

And this is just the tip of the iceberg. If voters entrust Prime Minister Orbán to continue leading Hungary forward, as I predict they will, more positive developments can be expected regarding taxation. I bet those will also go unnoticed by our opponents in the international press corps.