New tax cuts to benefit hundreds of thousands of mothers in Hungary

National Economy Minister Márton Nagy detailed the fiscal impact of recently announced tax cuts for mothers with children in a social media post on Tuesday.

Tax cuts and tax exemptions for mothers

A table in the post shows that personal income tax exemptions for mothers under 30 with one child will reduce central budget revenue by HUF 40bn (EUR 100m) in 2026. The measure will affect 55,000-65,000 women.

According to the government’s official site, PIT exemptions for mothers of two children will shave an annual HUF 120bn (EUR 300m) off-budget revenue when the measure is introduced for those under 40 in 2026, impacting 110,000-120,000 taxpayers. The measure will be expanded to 210,000-230,000 tax-paying mothers between 40 and 50 in 2027, reducing budget revenue by HUF 231bn (EUR 575m), and to 210,000-230,000 taxpayers between 50 and 60 in 2028, cutting revenue by HUF 248bn. When the measure is extended to 100,000-110,000 mothers over 60 in 2029, annual budget revenue will decline by HUF 124bn as a result.

A PIT exemption for mothers of three children in force from October 1, 2025 will affect 200,000-250,000 taxpayers and cut budget revenue by HUF 200bn. Exempting mothers getting infant care support from PIT, from July 1, 2025, will affect 20,000-40,000 taxpayers and reduce budget revenue by HUF 10bn. The table shows that a PIT exemption for mothers of four, affecting 65,000-70,000 taxpayers, has a negative impact on the budget of HUF 50 bn each year. A PIT exemption for all Hungarians under 25 reduces budget revenue by HUF 230bn and affects 550,000-600,000 people.

As we wrote today, the latest average wage figures for Hungary shows an increase of over ten percent, details HERE.

General govt deficit close to HUF 68bn in January

Hungary’s cash flow-based general government had a HUF 67.8bn deficit for the month of January, the National Economy Ministry confirmed in a detailed release of data on Monday.

The central budget had a deficit of HUF 166.1bn at the end of the month, but the social security funds had a HUF 62.9bn surplus and separate state funds were HUF 35.4bn in the black.

The ministry said that revenue from tax and contributions had climbed 12.5pc from the same month a year earlier. Among expenditures, transfers to pensioners reached HUF 499.2bn, it added, pointing to a 3.2pc inflation-linked adjustment to preserve purchasing power. Spending on prenatal baby support credit reached HUF 21.6bn in January, up HUF 3.4bn from the base period. The government targets HUF 10.5bn in spending for the full year for interest-free credit it is offering to young blue collar workers.

The ministry noted that over 800,000 households were getting HUF 1,700bn in yields on retail government securities in the course of the year, which was “good for families, good for the economy and good for Hungary”. The ministry reiterated the government’s commitment to maintaining fiscal discipline, while reducing the budget deficit and state debt levels. “Support for economic development, families, pensioners, young people and local SMEs is at the focus of the 2025 budget,” it said.