Tisza Party tax plan would lower burden on low earners in Hungary while introducing new levy on billionaires

The Tisza Party’s proposed tax reform would significantly reduce the tax burden on lower-income earners in Hungary, while leaving higher earners largely unaffected and introducing a new wealth tax targeting the country’s wealthiest individuals.

According to details of the programme, the party aims to restructure personal income taxation through a system of targeted tax credits, effectively creating a more progressive framework without formally replacing the current flat 15% income tax rate.

The plan has been presented as part of an economic strategy focused on increasing net wages, boosting consumption, and making the tax system “fairer” across income groups.

Lower taxes for low and middle earners

Under the proposals, the tax burden on minimum wage earners would be reduced from 15% to an effective 9% through tax allowances, according to Istvány Kapitány, minister of economy and energy-to-be. This change is expected to benefit hundreds of thousands of workers, with estimates suggesting that those on the minimum wage could gain around HUF 20,000 (EUR 55) per month, or HUF 240,000 (EUR 660) annually.

For employees earning below the median wage — currently around HUF 625,000 (EUR 1,715) gross per month — the party proposes a sliding scale of tax relief.

According to the programme:

• At a gross salary of HUF 420,000, workers would retain an additional HUF 15,000 per month
• At HUF 500,000, the benefit would be around HUF 10,000 monthly
• At HUF 625,000, the monthly gain would be approximately HUF 5,000

Overall, this translates into annual gains ranging from HUF 60,000 to HUF 180,000 for affected employees.

Importantly, under the plan, those earning above the median wage would continue to pay the current 15% personal income tax rate, meaning no increase in tax burden for higher earners.

Tax credits instead of a full system overhaul

The Tisza Party’s model would retain the existing flat tax structure in formal terms, but introduce a tax credit system that gradually reduces the effective tax rate for lower-income brackets.

This would create a form of progressive taxation in practice, with the effective rate rising gradually from around 9% at minimum wage level up to 15% at and above the median income threshold.

The party has also confirmed plans to reintroduce a simplified, more widely accessible version of the small business lump-sum tax (KATA), which it argues would support entrepreneurship and reduce administrative burdens on small firms.

Wealth tax for the richest households

A key new element in the programme is the introduction of a 1% annual wealth tax on net assets exceeding HUF 1 billion. The tax would only apply to the portion above that threshold.

According to estimates cited by Pénzcentrum, such a measure could generate between HUF 100 billion and HUF 150 billion annually for the state budget.

However, tax experts have warned that implementing a wealth tax could prove complex, particularly in terms of valuing assets such as property, business shares, artworks and luxury goods. Concerns have also been raised about potential capital flight and tax optimisation strategies.

Experts highlight international mixed experience

Analysts have pointed out that wealth taxes have produced mixed results internationally. While they remain in place in some countries, such as Switzerland, they have been abolished in others, including Germany and Sweden, often due to valuation difficulties and capital mobility issues.

Despite these concerns, the Tisza Party argues that the reform package would both strengthen economic fairness and support growth by increasing disposable income for lower- and middle-income households.

If you missed it: How far is Hungary really from the euro? The reality behind the 2030 target