Hungary will raise corporate tax on its largest companies, introduce a wealth tax on billionaires and cut personal income tax for low earners under a draft 2027 budget, Prime Minister Péter Magyar told Parliament on 19 October 2026.
Hungary’s government has presented a draft 2027 budget that pairs higher corporate and sectoral levies with tax relief for workers and families, Prime Minister Péter Magyar said in a speech before the agenda in Parliament on 19 October 2026.
Magyar said the government would build a “fairer, developing and humane homeland” in place of a country designed to favour the privileged. The detailed document will go to the Budget Council before being submitted to the National Assembly.
Corporate tax
The current 9% corporate income tax rate for the largest companies, which are predominantly foreign-owned, will increase by a few percentage points for those with annual revenue above HUF 180 billion. The 9% rate will remain for companies below that threshold.
The corporate tax incentive system for large companies will be restructured. Benefits will be withdrawn from foreign multinational companies whose presence does not deliver genuine social benefits. Development tax allowances will be more targeted, and companies will be required to demonstrate added value.
Other business and sectoral taxes
- Retail: The tax rate for tax bases between HUF 1 billion and HUF 50 billion will rise to 0.45%, affecting about 3,000 businesses. Businesses with tax bases below HUF 1 billion will remain exempt to protect smaller family-owned shops.
- Sectoral contributions: Energy companies, banks, insurers and retail chains will be required to contribute more. Mining royalties will also increase.
- Advertising tax: The rate, currently 0%, will change to 3.75%.
- Company cars: Motor vehicle tax will remain deductible against the company car tax for a first vehicle, but this relief will no longer apply to a second vehicle.
- Price margin cap: The cap will be abolished, following a slowdown in inflation and an average annual decline in food prices.
Personal income tax
The personal income tax rate on the minimum wage will fall to 9% in 2027. The rate will also decrease for income below HUF 680,000 under a progressive system that gives the greatest help to the lowest earners. Nearly 2.5 million people will keep more of their earnings as a result.
The exemption from personal income tax for people under 25 will remain in place up to the average salary. The exemption for mothers will apply to monthly gross income of up to HUF 1 million, with personal income tax payable only on the amount above that threshold.
Wealth, excise and environmental taxes
A wealth tax on billionaires will affect approximately 15,000 people and could generate around HUF 200 billion in revenue. Taxes on products harmful to health and on distilled spirits will rise, and polluters will face higher taxes.
Family and social benefits
The government will double the family allowance, which has been unchanged for 19 years. This will improve the finances of one million families and 1.6 million children.
From January, no pension will fall below HUF 120,000, a fourfold rise from the current minimum of HUF 28,500. The budget allocates HUF 123 billion to raising the lowest pensions, and pensions that remain extremely low will rise progressively. The 13th-month pension and the first week of the 14th-month pension will be retained. The first phase of a SZÉP Card scheme for pensioners will cover more than two million people with pensions below HUF 500,000.
Disability and rehabilitation benefits will rise by 10%, orphan’s benefits by 20% and home care allowances by 50%. About 700,000 older people and people with reduced working capacity will receive higher payments.
The exemption from VAT on prescription medicines, introduced this year, will continue. Rules on the Baby Expecting Loan (Babaváró Hitel), the Family Housing Allowance Scheme (CSOK), the Rural Family Housing Allowance Scheme (falusi CSOK) and utility price reductions will stay unchanged.
Public sector pay and healthcare
The government will allocate HUF 677 billion to public sector pay rises covering 603,000 employees. Average increases include 17% for 123,000 healthcare professionals, 17.8% for state social care staff, 15% for law enforcement personnel, 21.5% for support and technical staff in public education, and 10.7% for cultural and community education workers. Teacher and judicial pay rises will continue, with HUF 178 billion allocated, and HUF 10 billion is set aside for teaching staff at state-maintained universities.
Healthcare will receive HUF 510 billion more than this year, a rise of 12.5%. This includes HUF 192 billion for wages, HUF 95 billion for high-cost hospital medicines and HUF 51 billion for hospital operating funds.
Investment and development
Over ten years, the Baross Gábor Railway Development Plan will allocate HUF 3,550 billion to rail modernisation. A further HUF 100 billion will go on road repairs. EU-funded programmes will direct HUF 868 billion to grid development, wind energy, energy storage, geothermal energy and advanced metering.
How the budget will be financed
The tax cuts, family allowance, pension rises, wage increases and the Vilma Hugonnai healthcare programme will together add more than HUF 2,100 billion to expenditure. The government plans to pay for this by ending wasteful spending, eliminating overpriced procurement, withdrawing benefits from companies connected to political interests, cutting spending on communications and propaganda, and scaling back KEKVA public-interest asset management foundations.
The budget would reduce the general government deficit from 7.5% at the end of this year to 4.9% within one year, while retaining a HUF 300 billion contingency reserve. The TISZA party says the draft will fulfil more than 70 of its commitments for the four-year government term.
