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.

A sustained and substantial improvement in earnings started in 2013 in Hungary. In that year the country managed to repay its previous IMF loan, giving the government more freedom to reform and restructure the tax system, including reducing taxes on labour. The six-year minimum wage agreement launched in 2017 doubled the minimum wage for jobs requiring qualifications by 2022 and increased the overall minimum wage by 80 per cent.

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.