The big showdown: Is life better in Romania than Hungary?
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From taxes and salaries to cost of living and family benefits, an insightful comparison between Romania and Hungary reveals slight contrasts in quality of life. While it is an ambitious commitment to demonstrate which of the two countries offers a better life, a video showcased some interesting points.
Romania vs Hungary
Recently, Pénzcentrum has made a comparison of life quality in Romania and Hungary, based on an informative YouTube video. The video delved into a detailed comparison of the quality of life between Hungary and Romania, examining over ten objective indicators. Building on insights from a previous analysis comparing Hungary and Slovakia, the creator aimed to determine “where life is better” using measurable factors. While acknowledging that emotional factors like family ties or national identity often influence personal choices, the video concentrated on economic and social metrics to provide an objective evaluation of living conditions in Romania and its neighbour.
Taxation and salaries
Taxation and salaries in Romania show a notable contrast when compared to Hungary. In Romania, the deductions from gross salaries range between 40-45%, which is significantly higher than Hungary’s 33.5%. However, for minimum wage earners, Romania’s deductions drop to 35.7%, which highlights the burden of taxation on higher salaries. When it comes to minimum wage, Romania holds the advantage with both gross and net figures leading in comparison to Hungary. Conversely, Hungary surpasses its neighbour in terms of average earnings, particularly net salaries, due to the higher deductions imposed in Romania.
Unemployment
Unemployment rates reveal a slight disparity as well, with Hungary reporting 4.5% and its neighbour at 5.4% as of January this year. This indicates a marginally healthier job market in Hungary.
VAT
The Value Added Tax (VAT) landscape further distinguishes these two nations. Hungary imposes a VAT rate of 27%, which is considerably higher than Romania’s 19%. Nonetheless, both countries offer reduced VAT rates on certain products; for instance, Hungary applies lower rates on items like milk (18%), medicines (5%), and newspapers (0%), while its neighbour offers reduced rates for food (9%) and books (5%).
Romania might edge ahead in some or even all comparisons as of today but it’s telling that such a comparison is even taking place. 15 years ago Hungary was light years ahead of its eastern neighbour, now it’s jockeying for position in the league tables with Bulgaria for the ignominious title of poorest country in the EU. I don’t read about anyone comparing Romania with either Poland or Czech Republic, these used to be Hungary’s peer countries, now they’re leagues ahead.