The Prime Minister said they have concluded a tax reduction and tax simplification agreement consisting of eleven points with the Hungarian Chamber of Commerce and Industry worth, according to estimates, approximately HUF 80 to 90 billion.
“We will reduce the taxes of businesses, and will cut back their bureaucratic burdens,” he added.
At the event held together with the President of the Chamber, Mr Orbán said the first important step of the package of measures was the announcement of the availability of subsidised loans with fixed three per cent interest for businesses, while in the present second phase, they are concluding an agreement on eleven measures at the request of the Chamber.
As part of the first one, they will gradually increase the limit of VAT exemption; this means that in 2026 the limit of VAT exemption will be HUF 20 million, in 2027 HUF 22 million, while in 2028 HUF 24 million, the Prime Minister announced, adding that “these are increasing numbers, this is good news,” meaning an increase in the available benefits, rather than an increase in burdens.
Mr Orbán mentioned the raising of the general cost ratio of flat-rate taxpayers as the second item. In his words, here, too, they agreed for a period of three years. In 2026 they will raise it to 45 per cent, in 2027 to 50 per cent, while “regarding 2028, we’re still negotiating,” the Prime Minister added.
He said the third measure involves the reduction of the social contribution taxbase of full-time individual entrepreneurs. According to their calculations, as a result, the monthly tax burdens of 140,000 businesses will decrease.
The Prime Minister spoke about the extension of eligibility for the tax of small businesses as item number four. With this, approximately 4,000 to 5,000 businesses will be able to join this category offering advantages, he pointed out.
The Prime Minister announced that they would support businesses with a tax benefit of HUF 100 million in the rehabilitation of environmental damage and green investments.
“If I translate this into Hungarian, this means that if someone implements a brownfield investment and therefore the environmental impact must be reduced or earlier damage must be rehabilitated, businesses can now write off the cost from their taxes,” Mr Orbán said, expressing hope that this may give brownfield developments a boost.
Regarding the next item, the Prime Minster said Hungarian energy providers will receive a tax benefit in relation to the modernisation of their infrastructure. In this regard, Mr Orbán said at the request of the Hungarian Chamber of Commerce and Industry, they will encourage large energy provider companies to carry out these developments and to thereby help businesses.
“We are expecting developments, meaning that we sincerely hope that everyone will proceed as dictated by business logic, meaning that rather than increasing their profits, energy providers will boost their developments, the extent of their developments,” he stated.
At the press conference, the Prime Minister announced that they would also raise the brackets of the retail tax, as a result of which – according to their calculations – the burdens of 3,500 businesses would decrease.
“We’re talking about retail, the rates remain the same, we’re not changing the rates; it’s the brackets of the tax that we’re increasing,” this will provide more favourable taxation for businesses, he highlighted.
Regarding item number eight, Mr Orbán said he accepted, but “with an aching heart” the postponement of the raising of the excise duty on fuels by six months.
In the context of the need for raising the excite duty at the rate of inflation, the Prime Minister said in Hungary taxation is a sensitive issue, and it is best if there is an organising principle, “rather than having to fight the same battles time and time again, you know that there is a principle and that will be observed.”
He stressed that this should take place effective from 1 January, but the Chamber requested the postponement of this measure.
“I can’t not maintain this principle, but what I can do is that we’re postponing this for six months, and at the end of these six months, we’ll sit down again to talk, and if the Chamber’s request is still justified, we can extend it,” he said, mentioning that this measure results in a loss of revenue worth HUF 20 billion for the budget.
Mr Orbán announced a significant reduction in the administrative burdens of businesses as measure number nine, stressing that the raising of the limit of the corporation tax advance from HUF 5 million to HUF 20 million will favour some 20,000 businesses.
They will raise the limit for the simplified reports of micro-businesses from HUF 150 million to HUF 180 million which means that around 10,000 businesses will be able to opt for simpler and swifter administration, he informed members of the press and the public.
He added that they would additionally implement a special administration reduction for 80,000 individual entrepreneurs. In their case, the National Tax and Customs Administration (NAV) will automatically carry out the reporting of the insured status, while the frequency of the submission of returns for the social contribution tax will change to quarterly.
At the press conference, the Prime Minister stressed that the raised bank levy would compensate for the extra expenditures of these measures in the magnitude of HUF 80 to 90 billion.
He said there will be a reasonable debate about this in the realm of Hungarian economic policy which he would not like to sweep off the table.
This is about how far the system can be stretched, and what the ratios should be – in terms of burdens – between the taxation of production sectors and the taxation of the financial sector, he explained.
The government is familiar with the basic tenets of modern economics, and is aware that “no economic system of any kind is conceivable without a well-functioning, stable bank system,” he said, adding that yet, at this point in time, they are looking for ways in which to encourage as many production activities as possible with tax benefits.
“We regard the considerations of the financial sector as important, but as considerations that only come second after this,” he observed.
He also said there is another position unfolding, the advocates of which would reduce the bank levy, whilst they would also reduce the grants provided for businesses.
One school tries to regroup funds from the financial sector in the direction of the production sector, while the other school from the production sector in the direction of the financial sector, he indicated, adding that some reasonable balance must be sought between the two.
The existence of jobs is the number one priority for the government, and as there are jobs mostly in production and services, they take priority, he laid down.
Mr Orbán expressed hope that there would be agreements similar to the present one between the government and the Chamber also in the future as the cabinet accepted that “the Chamber has changed tracks.”
This is a different kind of Chamber from the earlier one, and the government sees opportunities in this, the Prime Minister pointed out, adding that the Chamber takes part in consultations about economic policy decisions which will have to be continued and reinforced.
The next agreement will be about how to hand over to or share with the Chamber state responsibilities related to the management of the economy. Talks regarding this are ongoing in various task forces, he stated.
In the Prime Minister’s view, in the longer term and especially in the present chaotic situation, the Hungarian economy has a vested interest in the Chamber taking part equally in economic policy decisions and the management of the economy, and even in the Chamber being vested with independent decision-making powers.
At the press conference, Mr Orbán said Europe is heading for a state of war which has severe consequences for economic policy, but Hungary is able to build a Hungarian national economic policy instead of a wartime Brussels economic policy.
The government has been faced with a very difficult dilemma since the start of the war, and this presents us with an increasingly grave challenge, he added.
The rhetoric is becoming increasingly tougher, we are faced with an ever tougher war rhetoric, and we are now at the point where terms such as ‘war economy’ are common usage in European politics, or statements such as that by 2030 we must be ready to wage a war no longer provoke any excitement, these have become ordinary, everyday political claims, he added.
In his view, this has grave consequences for economic policy because economic policy is not just about today, but also about tomorrow, “we must know what to prepare for.”
In his words, a plan of some kind constitutes the basis of every economic policy, and at this point in time, the situation is that admittedly the Brussels plan is to build a war economy in Europe.
They are adopting documents about this, leaders are making statements to that effect, he observed.
He said this mentality includes Ukraine’s European Union membership, the maintenance in arms of an enormous Ukrainian army from EU money and directing 20 to 25 per cent of the European Union’s next seven-year budget to Ukraine.
The great dilemma is, he said in continuation, whether we should accept that there will be a wartime economic policy in Europe and Hungary cannot stay out of this, we should adjust ourselves to this framework and try to make the most of it within the given boundaries, or we should not accept this and while the whole of the European Union is in the process of building a wartime economic system, we should create a national economic policy of our own.
He said, according to his opinion shared with Minister for the National Economy Márton Nagy, Hungary is able to build a national economic policy instead of the wartime Brussels economic policy, but this must be “tabled” time and time again to see whether this claim continues to hold.
When they agreed with the Chamber on issues of taxation, the government put this question on the agenda and concluded that “this is the basis of today’s agreement – that it is possible to pursue an economic policy that is not heading for war, and to follow instead Hungary’s national economic interests,” he laid down.
The Prime Minister stressed that we would maintain this, even if Hungary was unable to entirely withdraw itself from under the effects of the war.
In Hungary, there is “a political wrangle” about the impact the war has on the economy, but in his view, no one in their right mind questions the fact that the war has a negative impact on the Hungarian economy and the entire economy of the European Union, the Prime Minister stated, stressing that against the background of an economic growth blocked by the war, we must persevere with our own non-wartime national economic policy.
