Hungarian Conservative

From 2010 the Hungarian government changed the previous approach to taxation entirely. This meant a significant reduction in taxes on labour, leaving more money for employers and employees, a huge improvement in the efficiency of consumption tax collection, and the most attractive corporate tax rate in the EU. The government has no plans to increase tax rates but is developing innovations that will make tax compliance simpler, less administrative and more efficient for both the tax administration and the taxpayer. It is fair to say that Hungary’s tax innovation has now become a best practice for the EU.

In 2020 and 2021 both the number of births and the fertility rate increased in Hungary during the COVID-19 pandemic because the poverty and disadvantage of those with children relative to childless people decreased to such an extent that having children was no longer a financial disadvantage in 2019 and 2021.

In 2021 Hungary had the tenth lowest proportion of the population at risk of poverty or social exclusion in the EU, at 18.4 per cent. This compares to 30.6 per cent in 2014, when we ranked twenty-fourth, and our improvement of 12.2 percentage points is the largest among Member States.

GDP per capita growth has been above the EU-27 average in every year since 2010, so the Hungarian economy has grown faster than the EU average. Our decline in 2020 was also below average, and even below the large decline in 2009—despite the fact that the EU average decline in 2020 was larger than in 2009.

In the second part of our series looking at important facts concerning the Hungarian economy and society, our authors shed light on how the Orbán governments have managed to achieve a spectacular turnaround in terms of employment after 2010.