On Wednesday, Prime Minister Viktor Orban announced a substantial tax refund to families with kids. Many details were left undiscussed at the time of the announcement, but the Prime Minister and his economic adviser have since shared more details.
The Details of the Rebate
As early as 2022, many Hungarian families may see an income tax refund totaling $2 billion.
Orban states that the rebate would be for parents whose taxes are paid as small business owners. By mid-February, he estimates rebates adding up to as much as 600 billion HUF for parents.
The government has already announced plans to provide rebates on earnings if the GDP reaches 5.5 % in 2021. Orban is predicting growth to exceed that mark, barring any setbacks during the end of the year.
The Advisor to the Prime Minister estimates that the average family will receive EUR 1,154 (400,000 forints). The one-time tax return is aimed at low- and middle-income families, but all parents qualify, regardless of income.
In the case of both parents having jobs, the family may receive a personal income tax refund of up to EUR 4,618 (HUF 1.6 million). This will affect 1.5 million individual filers, as well as 1.1 million families. The maximum amount of the refund is EUR 2,309 (HUF 800,000). This means those earning over the Hungarian average pay will not qualify for more refunds.
Paying for the Rebate
The Ministry of Finance calculated the year’s budget and a GDP growth of 4.3 percent, with each percentage point adding approximately a 250-billion budget margin. This means that the rebate is covered when growth is 5.5 percent.
Orban has also made it a point to clarify that the personal income tax credits people will receive will come from what they have actually paid; it is not a handout. Orban has gone on to stress that this will be a one-time credit and not a regular payment.
Context for the Rebate
The Prime minister has also stated that the people will be consulted before final decisions are made. Questions about the PIT refund will be asked in the just-announced National Consultation public survey.
Recently, the Hungarian government has introduced several measures aimed at helping families financially. For instance, Orban announced earlier that those under 25 won’t have to pay personal income tax. Additionally, the 13th-month pension has been reintroduced and is set to resume two weeks before next year’s election.
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