Government Announces Europe’s Biggest Tax Cut + Video

The government measures were presented by Gergely Gulyas, PM Orban's Office Chief, and Government Spokesperson Eszter Vitalyos.

Gergely Gulyas, PM Orban's Office Chief (Photo: Zoltan Havran)

Prime Minister Viktor Orban’s annual state-of-the-nation address laid out significant tasks for the government, which held a meeting yesterday. “The prime minister anounced the year of breakthroughs, and we will implement Europe’s largest tax reduction program,” announced Gergely Gulyas, the minister in charge of the Prime Minister’s Office.

In line with PM Orban's announcement, tax benefits related to childbearing will increase, and all women who have children before the age of 30 will be exempt from paying personal income tax.

Starting October 1, mothers raising three children will no longer have to pay personal income tax.

This measure will affect approximately 250,000 mothers, leaving a total of two billion forints in their pockets. For mothers with two children, the exemption will be introduced gradually over four years, in an age-based, phased system. Beginning in 2026, mothers under 40 and raising two children will receive income tax exemptions, benefiting 120,000 mothers at a budgetary cost of 120 billion forints. Women aged 40 to 50 will become tax-exempt in 2027, affecting around 210,000–220,000 people. Then, in 2028, the measure will be extended to those aged 50 to 60, covering approximately 230,000 women. Finally, in 2029, tax exemptions will be introduced for mothers over 60, benefiting 110,000 people. This will complete the set of concessions available in Hungary's tax system for families with children.

“From July 1, both maternity (GYES) and child-rearing (GYED) allowances will be exempt from personal income tax,” announced Mr. Gulyas. Tax benefits after children will also double in two stages: first on July 1, then again on January 1, 2026. This will increase the tax benefit to 80,000 forints per month for families raising two children, and to 198,000 forints per month for families with three or more children. The combined effect of the tax exemption and the doubled family tax allowance will provide a family with two kids with an additional 130,000 forints per month, and a family with three children with an extra 190,000 forints per month.

Curbing the price hikes 

Mr. Gulyas also announced an action plan to control food prices, which will include market protection and profit restrictions while also reducing bureaucratic burdens on affected companies. If these measures do not yield results by spring, the government will impose price controls.

The government has authorized Minister Marton Nagy to implement 

a VAT refund program for retirees. According to calculations, this measure will provide each pensioner with an additional 5,000 to 10,000 forints per month.

Responding to questions, Mr. Gulyas confirmed that the refunds will be distributed via a card-based system, with details to be developed by the Ministry of Economic Affairs and presented to the government. He added that if the government had opted for a VAT reduction, retailers would have pocketed the profit, whereas this method ensures direct benefits for pensioners.

The era of rolling dollars is over 

The government also discussed the USAID affair, which Mr. Gulyas called the largest corruption scandal in the Western world, describing it as the most significant attempt at political influence and a major violation of sovereignty.

The abuses will be investigated with the help of a government commissioner, and MEP Andras Laszlo has been appointed to this role.

A report will be compiled detailing who received funds, what influence they exerted, and the objectives behind these efforts. “We will reveal who used ‘rolling dollars,’ how, and for what purpose,” stated Mr. Gulyas. He also confirmed that the commissioner’s report will be made public.

“It is unlikely that the network will cease its activities, but it will have to change its methods,” Mr. Gulyas stated, in response to a question from Magyar Nemzet. He expressed skepticism about the courage of the CDU/CSU and pointed out that in Germany, 600 media outlets and organizations received financial support. While it remains uncertain whether Brussels will replace Washington in funding these so-called civil organizations, the network’s operations will be restricted, he added.

The remedy would be a return to normalcy, but Brussels is incapable of recognizing even its own European interests,

– he said, when Magyar Nemzet's journalist asked about the EU’s continued support for Ukraine despite the war approaching an end and an anticipated Trump-Putin meeting.

Foreign Minister Peter Szijjarto was the one who negotiated regarding the peace talks, Mr. Gulyas recalled in response to a question about Hungary’s role in peace negotiations. - “We know our place, we know how big Hungary is,” he said, adding that in some areas, the Hungarian government’s position on the war has had a productive impact. Regarding Ukraine’s potential EU accession, he emphasized the importance of Hungarians understanding what such a move would mean for the country.

Mr. Gulyas also confirmed that U.S. President Donald Trump may visit Hungary, and preparations are underway for a meeting in Washington as well.

Constitutional amendments

The government has also discussed amendments to the fundamental law. One amendment will explicitly define that a person is either male or female. Another amendment pertains to the community protection program, affirming that local communities have the right to determine who they wish to live with. Additionally,

the fundamental law will include a ban on drug use 

and children’s right to physical and mental development.

Responding to a journalist’s question, Gergely Gulyas stated that laws preclude districts under left-wing leadership from circumventing the provisions. “We must see that the drug situation has worsened, which is why the prime minister expects government commissioner Laszlo Horvath to take action on the matter. Deterrent regulations must be introduced,” he stressed.

The issue of organizing Pride events was also raised in the context of constitutional amendments. It follows from the government's intention that it will not be possible to hold the parade in the form we have been used to in the past, said Gergely Gulyas.

Workers’ loan scheme has gained popularity

In recent weeks alone, investments worth over 70 billion forints have been implemented in Hungary, said government spokeswoman Eszter Vitalyos.

More than 12 thousand people have already applied for the workers' loan, and 7,800 have already been disbursed. The loans taken out typically reach the threshold of four million forints.

Two thousand businesses submitted applications for the 1+1 SME support program while 57 applications were received for the export stimulation credit scheme.

Budapest affairs and daylight saving time

When asked about Budapest purchasing land for the same amount of money it refuses to pay in taxes to the state, Mr. Gulyas said he considers the solidarity tax tax system fair, pointing out that some municipalities are wealthier than others and that it is in the interest of smaller towns that Budapest pays its share.

The case of Kriszta Bodis  was also raised. The Tisza Party attempted to secure a position for her in the municipality but was unsuccessful. Mr. Gulyas noted that the symbolic significance of the case far outweighs its practical importance. If the Tisza Party is trying to bring an LGBTQ activist to power, it is telling that this is such a priority to Peter Magyar and his party, he said.

The minister also addressed the issue of daylight saving time, stating that the government will align with the common EU position on He added that he hopes summer time will be adopted.

whether to adopt permanent summer or winter time once clock changes are abolished. 

He added that he hopes summer time will be adopted.

Mr. Gulyas also reported that the government plans to approve next year's budget by June 16.

Gergely Gulyas, minister heading the Prime Minister’s Office, and Eszter Vitalyos, government spokeswoman, held a government briefing under the title Why Does the Government Do What It Does? The online edition of Magyar Nemzet  provided continuous updates on the government’s announcements.

The government convened on Wednesday, with its agenda including the measures announced by Prime Minister Viktor Orban in his annual state-of-the-nation address on Saturday. These measures include a multi-faceted tax reduction program, income tax exemptions for maternity (GYES) and child-rearing (GYED) allowances, additional support for pensioners, a crackdown on drug traffickers, the Hundred New Factories program, protections for cash transactions and small municipalities, shutting off Soros-funded financial pipelines, and requiring Hungarian MEPs to file asset declarations in Hungary.

Cover photo: Gergely Gulyas, minister in charge of the Prime Minister's Office, at the government briefing (Photo: Zoltan Havran)