Burden on Hungary's windfall profit taxpayers revealed

Contrary to original plans, some extra profit taxes will remain in place in 2026, according to the government's 2026 budget plans. It was also revealed that the government expects to receive HUF 360 billion from the bank extra-profit tax next year, half of which can be written off if financial institutions increase their holdings of government securities.

The windfall profit tax on retail trade and insurance will remain in effect, as will the tax on the Brent/Ural spread.

Today, Márton Nagy, Minister of National Economy, published a table on his Facebook page that gives a clear overview of the extra profit tax receipts that the government expects next year.

The latest figures are in line with Portfolio's earlier estimates. A week ago, we calculated that even if banks and insurers halve their extra profits tax liability, the government would still collect HUF 460-470 billion in extra revenue next year compared to the baseline.

The Economy ministry now expects revenues to reach HUF 440 billion,

similar to the maximum tax relief for banks and insurance companies. Private taxpayers will pay HUF 130 billion, while Mol will pay HUF 50 billion into state coffers.

Note that the line "Insurance tax and supplementary tax" in the table is, according to our understanding, only the supplementary tax, and the insurance tax could amount to an additional HUF 160 billion in 2026.

The government announced in the summer of 2022 that it would tackle the budget imbalance by imposing an tax on what it called 'extra profits' the following year. This windfall profit tax, planned for one year, has been with us ever since and will be paid by companies - and those to whom it is passed on - next year.

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