In order to shore up the economy just ahead of a 2026 national election, the Hungarian Prime Minister Viktor Orban announced an income tax exemption for mothers of two or three children.
Launching Tax Exemption For Mother’s
Besides this, he also said to cap interest rates on housing loans at 5% from April as part of this initiative.
The veteran leader who has been in power since 2010 appears to have struggled to drag Hungary’s economy out of an inflation-led downturn.
The situation got complicated with prices back on the rise at the start of 2025 to Orban’s re-election bid.
While talking about this update, Orban said, “We are announcing the biggest tax reduction programme in Europe,” on Saturday.
Hungary’s Orban launches tax exemption for mothers, cap on housing loan rates
Prior to this the government had announced doubling of income tax benefits for families in two stages by January.
On top of this, Orban said his government would exempt mothers of two or three children from income tax, starting with mothers of three from October.
Further adding that the exemption for mothers of two will be phased in gradually from January.
According to Orban, “This will be a huge expense, but the reviving economy, the measures to support businesses and full employment combined are capable of paying for this in a way that the budget deficit and public debt both decline.”
Imposing Caps On Surging Food Prices
He said that his government was ready to impose caps on surging food prices unless talks with retailers succeed in keeping prices under control.
Further adding that they could also limit food retailing profits as a last resort.
When it comes to Hungarian inflation, it has scaled the EU’s highest levels two years ago.
It rebounded to 5.5% in January, above analysts’ forecasts, with monthly price growth accelerating to its fastest pace in two years as food, services and fuel prices all climbed.
Orban is said to be a critic of western military aid to neighbouring Ukraine during Russia’s nearly three-year-old invasion.
Orban claimed that Ukraine would never become a member of the EU as long as its entry was against Hungary’s interests.
Adding, “Ukraine’s entry would destroy Hungarian farmers, but not just them, the entire Hungarian economy.”
