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Finance Minister Details Tax Rebates for Parents Raising Children

MTI-Hungary Today 2021.09.24.

Finance Minister Mihály Varga revealed details of tax rebates for parents raising children in a video message posted on Facebook on Friday.

Varga said the rebates to be paid early next year would go to all parents eligible for family benefits. If both parents in the family are registered with an employer, they will both get the personal income tax rebate, he added.

Parents who earn their incomes as sole proprietors, subsistence farmers and landlords, or who pay the Itemised Tax for Small Businesses (KATA) or the Simplified Contribution to Public Revenues (ekho), will also be eligible for a tax rebate, he said.

KATA taxpayers will get a 25 percent rebate, while ekho taxpayers will get two-thirds of the 15 percent they pay back, he added.

The rebates are limited to the tax paid on income up to the average wage.

Some 1,900,000 parents are expected to get 600 billion forints in rebates under the government measure, conditional on GDP growth reaching 5.5 percent this year.

Meanwhile, addressing an annual meeting of economists in Budapest on Friday, Varga said Hungary’s GDP growth could reach 7-7.5 percent this year.

Hungary’s economy has reached pre-pandemic levels of performance and the pace of growth is expected to continue in the coming period, Varga said.

Varga said Hungary’s budget deficit projected at 7.5 percent of GDP this year would be “average” among EU member states, adding that government measures to jump-start the economy are supporting businesses and families to the tune of more than 13,000 billion forints in 2021 and 2022.

Credit rating agencies have acknowledged Hungary’s performance and the government’s economic policy, he said, adding that positive feedback is expected from Moody’s at a scheduled review late on Friday.

He said government spending would be “restrained” and efforts made to keep the public debt on a declining path.

featured image via Noémi Bruzák/MTI