Economy 19 August 2025, 2:05pm

Hungary unveils new tax cut plans - Here's the first opinion

Portfolio

In addition to reducing wage costs and tax rates, which remain high by European standards, employers are offering their employees real wage increases, despite the modest economic growth expected this year. This information was released on Tuesday by the National Association of Entrepreneurs and Employers (VOSZ), following the announcement of a 1 percentage point reduction in social security contributions. Meanwhile, the announcement also confirms that decisions have been made on other previously floated relief measures, such as extending the 3% interest rate on Széchenyi Card loans.

Following several negotiations at the Economy Ministry on Monday, it has been revealed that the social contribution tax could be reduced by 1 percentage point. On Tuesday, the VOSZ issued a statement on this, quoting Secretary General László Perlusz.

“We appreciate the government's prudence in adapting its industrial policy, industrial protection, and employment policy to the economic circumstances that have changed since last year's plans,” according to a statement from VOSZ.

László Perlusz welcomed the decision to extend the 3% interest rate on Széchenyi Card loans to other loans within the programme.

‘We consider it important to reduce taxes, contributions and administrative costs, as well as supporting the adoption of artificial intelligence technologies. We are actively involved in this through the Demján [Sándor] Programme and our own VOSZ developments,’ added the Secretary General.

In connection with last year's wage agreement, Perlusz emphasised: "We want to continue the wage convergence programme, but economic growth is significantly behind last year's plans, so renegotiating the schedule will be inevitable."

Economy Minister Márton Nagy has already projected such outcome.

"Given the government's openness, as demonstrated at the VKF [the Permanent Consultation Forum between the Competitive Sector and the Government] meeting on 18 August, there is a good chance that acceptable and motivating wage increases will be implemented without imposing excessive wage costs on businesses either next year or in the future.

"In addition to reducing wage costs and tax rates, which are still high by European standards,

employers are offering their employees a helping hand by increasing real wages, despite the modest economic growth expected this year.

"The goal, as set out in the EU directive, for the minimum wage to reach 50% of the average gross wage in Hungary by 2027, remains realistic," assessed Perlusz.

The VOSZ statement notes that Hungarian businesses are currently operating under "extremely difficult circumstances" and that these conditions must improve if companies are to retain jobs.

Cover photo: MTI Photo/Zoltán Máthé