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Promised PIT Refund for Families Could Total HUF 1.6 Million

Hungary Today 2021.06.11.

Prime Minister Viktor Orbán has announced a big personal income tax refund to families with children. Although many details of the measure were unclear at the time of the announcement, the Prime Minister’s economic advisor and the PM himself have since revealed more information.

On Wednesday, Orbán announced a significant personal income tax refund to families with children worth over HUF 550 billion (EUR 1.59 bn) early next year, if economic growth reaches at least 5.5% this year.

Orbán: Low-earning Parents Could Reclaim 2021 PIT if Economic Growth Reaches 5.5%
Orbán: Low-earning Parents Could Reclaim 2021 PIT if Economic Growth Reaches 5.5%

Monetary policy is set to shift towards a more hawkish stance as early as June, with a possible hike in the base rate, György Matolcsy, the governor of the National Bank of Hungary (MNB), told a conference on Wednesday. Meanwhile, the Prime Minister spoke of further tax cuts for SMEs and families and a potential […]Continue reading

As the Prime Minister did not go into detail at the time of the announcement, those were first shared by his economoic policy advisor.

If both parents have a job, a family can receive a PIT refund of up to HUF 1.6 million (EUR 4,618) before 2022, Márton Nagy told public broadcaster M1 on Wednesday.

Nagy revealed that around 1.1 million families, or 1.5 million individual earners in total, could be affected by the government’s new measure.

The advisor also told M1 that the maximum amount of the refund is HUF 800,000 (EUR 2,309), which means that those who earn above the Hungarian average wage cannot get more.

On average, families can expect to receive 400,000 forints (EUR 1,154), the prime minister’s advisor said.

The finance ministry has calculated this year’s budget with a GDP growth of 4.3 percent, and every growth higher by 1 percentage point opens up a HUF 250 billion margin in the budget, meaning that the newly announced measure will be covered if economic growth reaches 5.5 percent, Nagy added.

One of the most important details Márton Nagy unraveled was that not only will low and middle-income families be entitled to the one-time tax return, but all parents regardless of their level of income.

On Thursday, Viktor Orbán also clarified an important question at a press conference, saying that people can only get back the personal income tax they actually paid to the state.

“One shall only receive what they have paid, what they have worked for, what they have handed over to the state, we are not talking about a handout,” the prime minister emphasized.

Orbán also stressed that this is a one-off payment- it will not be a regular payment.

The prime minister also pointed out that people will be asked about the measure before a final decision is made, as the issue of the PIT refund would also be among the questions of the recently announced National Consultation public survey.

Orbán: Gov't to Launch National Consultation Survey on Reopening Economy
Orbán: Gov't to Launch National Consultation Survey on Reopening Economy

Hungary’s government is preparing for a period of pandemics and mass migration, Prime Minister Viktor Orbán said on Thursday. The government is launching a National Consultation public survey on reopening and strengthening the economy. From now on, the government will shift its focus from Covid-19 response to restarting the economy, he told a press briefing. […]Continue reading

In recent years, the government has introduced a series of measures to help families and encourage them to have children. Even though Viktor Orbán strongly denied it, the current measure is likely connected to the next general election in 2022. Earlier, the prime minister had declared that people younger than 25 will not have to pay personal income tax from next year. The reintroduction of the “13th-month pension” will also resume early next year with two-weeks worth of extra pension given right before the election.

Featured photo illustration via Pixabay