Part I — Situation overview

On the evening of Tuesday, 27 October, the Government submitted its first comprehensive tax-policy package to Parliament. According to reports by Portfolio and HVG, several bills appeared on the parliament’s website at once. According to Portfolio’s item-by-item comparison, the wealth tax bill differs at 16 significant points from the draft put out for public consultation on 6 October. The 110-page omnibus bill on amending certain tax-related and other connected laws introduces the exit tax. This would levy 15 per cent on the not yet realised capital gains of private individuals with substantial assets who end their Hungarian tax residence. A separate bill covers the special taxes on banks and insurers and the financial transaction levy. Another reshapes the allowances of the personal income tax (SZJA): allowances that reduce the tax base become fixed-amount allowances that reduce the tax payable, and a tax credit is introduced. The bill on phasing out the margin cap (state restriction of the retail margin on basic foodstuffs and drugstore products) was tabled on behalf of the Government by Deputy Prime Minister Bálint Ruff. Parliament decides on the laws; the Government submitted them as the proposer.

On the wealth tax, MIAK asked on 27 September for band-by-band revenue and avoidance estimates, and on 7 October for a public consultation report and a completed impact assessment sheet by the day of submission. The submitted text responds to several professional objections. Debts of foreign property-holding companies connected to the property can be deducted, companies with equity of up to HUF 100 million can opt for a simpler valuation, and anyone who uses the property valuation model of the National Tax and Customs Administration (NAV) with real data gets stronger protection. The disputed, uniform 15 per cent capitalisation rate in company valuation, however, remains. In the reports processed, the list of changes was compiled by the press itself. Nothing in the reports reveals whether the ministry has published the consultation summary and the updated impact assessment. MIAK wrote about the timing of phasing out the margin cap on 23 September and on 28 September, and about corporate tax and the deficit target on 20 October; this analysis does not return to those topics.

Behind the new elements of the package lies the same question: who pays, and who gains? According to Portfolio, alongside a HUF 264 billion tax cut for households, the Government expects HUF 929 billion in additional revenue, a net balance improvement of HUF 665 billion. In MIAK’s reading, the direction — reducing the burden on labour income while drawing in large fortunes and the financial sector more strongly — is consistent with programme point G8. The submitted materials, however, do not show the distributional effect by household type. And the exit tax steps onto EU-law terrain where whether it stands up in court depends on the detailed rules.

Part II — Grounding in the literature

Three sources provide a framework for assessing the package. According to the tax principles of John Stuart Mill (19th-century English philosopher and economist, one of the founding thinkers of classical liberalism), the requirement of equal sacrifice is met most equitably if the part of income necessary for subsistence is left untaxed. Mill also distinguishes between fortunes acquired through work and large fortunes that fall into one’s lap, and considers taxing the latter justified. The tax credit follows exactly the first principle, while the exit tax affects accumulated, not yet realised wealth gains. According to Thomas Piketty (French economist, leading researcher of long-term data on wealth inequality), the practical limit of taxing wealth is that substantial financial wealth is hidden in tax havens. He considers the automatic, international exchange of banking data to be the first step. The World Bank’s 2015 World Development Report shows, from the perspective of behavioural economics, that willingness to pay taxes is explained less by fear of punishment than by whether people see the system as fair. The detailed discussion of the literature — by author, with quotations — can be found in section 6.4 Literature in detail.

Part III — MIAK’s concrete proposal

MIAK proposes three measurable measures, each tied to a stage of the parliamentary process. The first makes the distributional effect of the personal income tax package visible, the second reduces the EU-law and double-taxation risks of the exit tax, and the third puts the financial special taxes and the whole package on a public, ex-post scale.

3.1 A distribution table by income decile and number of children for the personal income tax package (before the start of the general debate)

According to HVG’s description, the tax credit up to the minimum wage is 6 per cent of the minimum wage. With the 2026 gross minimum wage of HUF 322,800, this is HUF 19,368 a month, so the effective tax rate of a minimum-wage earner will be 9 per cent. For wages above the minimum wage, the credit decreases by 6 per cent of the excess and runs out at twice the minimum wage. Under the bill, the tax credit is applied first, then the mothers’ allowances, and finally the family allowance. The remaining part of the latter can also be deducted from social security contributions. HVG concludes that anyone who has so far paid no personal income tax because of an allowance will receive practically nothing from the tax credit. The full exemption of mothers of three children and of mothers of two children under 40 changes into an allowance of HUF 150,000 a month, which corresponds to the tax on a wage of one million forints a month. MIAK proposes that the Ministry of Finance publish a microsimulation table before the general debate. The table should show, by income decile and by number of children (0, 1, 2, 3 or more), the monthly net change compared with the 2026 rules. It should include together the tax credit, the restructuring of the allowances, the ceiling of the mothers’ allowances and the doubling of the family benefit. A separate row should show how many taxpayers receive no actual tax credit because their tax is already zero. If the table shows that families with children in the lower deciles do not gain, it would be worth pricing, in the detailed debate, an amendment allowing the unused tax credit to be deducted from contributions as well. Programme points DM2 and G7 ask for precisely this. In Mill’s framework (see 6.4.1), the tax credit is the modern form of exempting the subsistence minimum from tax, but it only helps those who have tax to pay.

3.2 Exit tax: a fixed deferral period, a value-decline correction and a rule against double taxation (by amendment in the detailed debate; first NAV statistics by 31 March 2028)

According to Portfolio’s description, the exit tax applies to anyone who was a Hungarian resident in at least five of the previous ten tax years. A further condition is that their assets concerned together exceed HUF 500 million, or that they hold a stake of at least 20 per cent worth at least HUF 250 million. The tax base is the market value on the day before residence ends, and losses on individual assets cannot be deducted from gains. When moving to a state of the EU or the European Economic Area (EEA), an automatic, interest-free deferral applies, according to Portfolio’s summary typically until realisation. Attila Kövesdy, state secretary for taxation, however, spoke to the paper of a 10-year deferral. MIAK proposes four amendments. First: the law should clearly lay down the deferral period and what happens when it expires. Second: if the asset is later sold for less than its value at the time of the move, the tax should have to be reduced to the gain actually realised, if the receiving state does not take the decline in value into account. EU case law also requires this (see 6.5). Third: NAV should publish guidance on how double taxation can be avoided if the receiving state would tax the entire gain. A return rule should also be included in the law: for anyone who moves back within a given period and has not sold their assets, the deferred tax should lapse. Fourth: the group of states “ensuring appropriate cooperation in tax matters” should appear on a public list, and NAV should report annually the number of notifications and the amounts deferred and collected. In Piketty’s framework (see 6.4.2), the exit tax only works with automatic exchange of data (G8, G3).

3.3 Financial special taxes: a multi-year path, the tax expenditure of the government-bond allowances and an ex-post review of the package (by the final vote; review by 30 June 2028)

According to Portfolio, the bank windfall tax in 2027 essentially follows the 2026 rule mechanically. The rate is 10 per cent up to a tax base of HUF 20 billion and 30 per cent above it, and the tax base starts from the 2025 profit. After an increase in holdings of long-term forint government bonds, 10 per cent of the increase, but at most 30 per cent of the tax, can be waived. The banded allowance of smaller insurers in the insurance tax is abolished. For the transaction levy, the household exemption threshold rises from HUF 50,000 to HUF 150,000, and the per-item cap from HUF 20,000 to HUF 30,000. MIAK proposes that the Ministry of Finance publish three things by the final vote on the budget bill. First: the expected tax expenditure for 2026 and 2027 of the bank and insurer allowances linked to government-bond purchases, because this is a hidden financing cost. Second: the 2028–2029 path of the bank windfall tax, with conditions fixed in advance. Third: the split of the change in the transaction levy between households and companies, and the expected premium effect of abolishing the insurer bands. For the whole package — the tax credit, the exit tax, the special taxes and the phasing out of the margin cap — an ex-post review under programme point G20 (a Drucker audit, i.e. a comparison of expected and actual results) should be prepared by 30 June 2028. Food prices should be examined on the basis of market price information under MG2. In the World Bank framework (see 6.4.3), a predictable rule that is not rewritten year after year itself strengthens willingness to pay taxes.

The three proposals are linked by one principle: a tax reform is the more durable, the more precisely it can say whom it affects, how much it costs and when it will measure itself. Mill provides the yardstick of a fair distribution of burdens, Piketty the international limits of wealth taxation, and the World Bank the insight that taxpayers also watch the fairness of the system, not just the rates.

Part IV — Expected effects and risks

Dimension Expected effect Risk
Economy the exit tax becomes less open to challenge under EU law; the path of the special taxes becomes more predictable for banks and insurers fixing a multi-year path narrows the budget’s room for manoeuvre; the return and value-decline rules reduce expected exit tax revenue
Society before the vote, Parliament sees which household types gain and which do not if a tax credit deductible from contributions is priced in, the package’s net balance worsens; if not, families with children in the lower deciles may be left out
Public administration the NAV statistics and the ex-post review make the package measurable extra work at NAV and in the ministry; the microsimulation requires linked tax data
Legal certainty the deferral period and the handling of double taxation are settled at the level of law an overly detailed rule may open new loopholes, for example through restructuring assets before the move

The main question to weigh is the relationship between revenue and legal certainty. The value-decline correction and the return rule mean less revenue in the short term, but without them a challenge to the exit tax before the EU court could jeopardise the entire revenue. The distribution table does not decide anything. But if it turns out that the tax credit has barely any effect in the lower deciles, the debate on deduction from contributions or on the role of the family benefit can proceed on the basis of evidence, not assumptions. The multi-year path of the special taxes tips over to the risk side if the conditions are rigid: this is why the path must be fixed with a review point linked to the profitability of the banking sector.

Part V — Measurability and summary

5.1 What is worth tracking? (proposed KPIs)

MIAK proposes tracking the following key performance indicators (KPIs):

  • Distribution table: whether the table by income decile and number of children appears before the start of the general debate, with a separate row on those who receive no actual tax credit.
  • Reach of the tax credit: whether, on the basis of the 2027 tax returns, it is published by 31 May 2028 what percentage of those eligible received an actual tax credit, by decile.
  • Exit tax: whether the promulgated law lays down the deferral period and the value-decline correction; whether the first NAV statistics on notifications, the amounts deferred and collected, and changes of residence in the fourth quarter of 2026 appear by 31 March 2028.
  • Financial special taxes: whether the tax expenditure of the government-bond allowances and the 2028–2029 path of the bank windfall tax are public by the final vote.

5.2 Summary

MIAK asks that Parliament see, before the vote, who gains and who does not from the restructuring of the personal income tax. In the detailed debate, a fixed deferral period, a value-decline correction, and rules against double taxation and on return should be written into the exit tax. The financial special taxes need a multi-year, conditional path, and the whole package needs a public ex-post review by 30 June 2028.

Two MIAK foundational values are involved. Data-drivenness, because the debate on the distributional effect can only be substantive with decile-by-decile figures, not with examples of the average taxpayer. Transparency, because the exit tax and the government-bond-linked allowances are public-finance items whose size can today only be estimated, although they should be known before the decision.

Part VI — Reasoning and further sources

6.1 Press framing by spectrum

Liberal-left band. HVG framed the restructuring of the personal income tax as the fulfilment of a promise: it calculated the amount of the tax credit to the forint, and emphasised that the formula delivers the HUF twenty thousand a month and the 9 per cent rate promised in the campaign. At the same time, it was HVG that pointed out that taxpayers who were already tax-exempt receive nothing from the tax credit, and explained this by negative taxation being alien to the Hungarian system. Articles by Telex and 444.hu were not among the sources collected by the press monitor for this topic, and the day’s output of Népszava could not be assessed.

Public-affairs band. 24.hu presented the wealth tax in an interview, from an entrepreneur’s perspective: it talked with Gábor Bojár, founder of Graphisoft, about whether a fairer society can be built with a tax affecting billionaires (the article could not be downloaded publicly). The technical details, the exit tax and the special taxes did not come to the fore in this band.

Economic band. Portfolio was the most detailed: in separate articles it went through the 16 changes to the wealth tax, the sections of the exit tax, the financial special taxes and the phasing out of the margin cap. One of its analyses criticised the Government’s communication: the favourable elements reached voters before the documents appeared, while the more painful steps were packaged as a “fairness correction” or “closing loopholes”. In an earlier article it published expert criticism of the uniform-formula valuation of unlisted companies.

Conservative band. Articles by Magyar Nemzet were not among the main sources on this topic in the processed material, and the day’s output of Mandiner could not be assessed.

6.2 Facts and data

Item Value Source
Submission 27 October 2026, evening; the wealth tax, the tax omnibus bill (exit tax), the financial special taxes and the restructuring of the personal income tax allowances Portfolio, HVG, 27–28 October 2026
Changes to the wealth tax 16 significant points compared with the 6 October draft; rates unchanged (1%, 1.5% above HUF 100 billion), the HUF 1 billion threshold remains Portfolio, 28 October 2026
Exit tax rate and scope 15%; at least 5 years of Hungarian residence in the previous 10 tax years; value of the assets concerned above HUF 500 million, or a stake of at least 20% worth at least HUF 250 million Portfolio, 28 October 2026
Exit tax asset scope securities, shareholdings, options and certain derivative positions, crypto-assets, long-term investment accounts (TBSZ), voluntary pension savings accounts (NYESZ), residual rights under life insurance; cash and bank deposits are excluded Portfolio, 28 October 2026
Exit tax deferral when moving to an EU or EEA state, automatic, interest-free, typically until realisation; according to the state secretary’s oral statement, 10 years Portfolio, 28 October 2026
Entry into force of the exit tax 1 January 2027 Portfolio, 28 October 2026
Tax credit 6% of the minimum wage (HUF 19,368 a month with the 2026 minimum wage); runs out at twice the minimum wage HVG, 28 October 2026
Minimum wage 2026 HUF 322,800 gross HVG, 28 October 2026
Family allowance HUF 20,000 a month for one dependant, HUF 40,000 for two dependants, HUF 66,000 for three and for each further dependant (as worded by HVG) HVG, 28 October 2026
Mothers’ allowance HUF 150,000 a month for mothers of three children, mothers of two children under 40 and mothers under 30 (the tax on a HUF 1 million wage) HVG, 28 October 2026
Bank windfall tax 2027 10% up to a tax base of HUF 20 billion, 30% above it; payment on 10 June and 10 December 2027; government-bond allowance: 10% of the increase, at most 30% of the tax Portfolio, 27 October 2026
Insurers the banded allowance of smaller insurers is abolished (until now they paid 25% of the rate up to HUF 250 million and 50% up to HUF 1.75 billion) Portfolio, 27 October 2026
Transaction levy household exemption threshold from HUF 50,000 to HUF 150,000, per-item cap from HUF 20,000 to HUF 30,000 Portfolio, 27 October 2026
Balance of the tax changes HUF 264 billion tax cut for households, HUF 929 billion additional revenue, net HUF 665 billion, around 0.7% of GDP Portfolio, 25 October 2026
Those affected by the 9% rate 2–2.5 million employees Portfolio, 25 October 2026

6.3 Policy dimensions

  • Economy (programme points) — taxation of capital income and accumulated wealth gains (G8); simplification and progressivity of the tax system (G3); measuring wealth inequality by decile (G7); ex-post impact assessment (G20); the burdens and stability of the financial sector (G22);
  • Social policy (programme points) — public monitoring of wealth inequality, for which anonymised data from wealth tax and exit tax returns provide a new source (SZ9); targeting of support (SZ1);
  • Demography (programme points) — impact assessment of the restructuring of the family and mothers’ allowances (DM2), differentiated family policy (DM5);
  • Agriculture (programme points) — public availability of market price information, the basis for tracking food prices after the phasing out of the margin cap (MG2).

6.4 Literature in detail

6.4.1 John Stuart Mill: Principles of Political Economy

Mill derives equality of taxation from the principle of equal sacrifice. In his view, the same percentage takes more from a small income than from a large one, because for a small income it affects the necessaries of life. As a solution, he accepts Bentham’s proposal:

“The mode of adjusting these inequalities of pressure which seems to be the most equitable is that recommended by Bentham, of leaving a certain minimum of income, sufficient to provide the necessaries of life, untaxed.”

In other words: the most equitable adjustment of the inequalities of burden is Bentham’s proposal, namely that the part of income sufficient for subsistence be left untaxed. At the same time, Mill considered a generally graduated income tax a penalty on industry. He did, however, see the taxation of large fortunes acquired through gifts and inheritance, not through work, as justified, up to the limit where it begins to encourage avoidance. The Hungarian tax credit is full up to the minimum wage and then gradually runs out, thus adapting the subsistence-minimum principle to today’s wage structure. Mill’s framework, however, also shows that the exemption is only worth something to those who have tax to pay. This is why the distribution table of proposal 3.1 is needed.

📖 Source: John Stuart Mill: Principles of Political Economy (1848; abridged edition by J. Laurence Laughlin, 1885)

6.4.2 Thomas Piketty: A tőke a 21. században

Examining the geographical distribution of global wealth, Piketty concludes that a substantial part of the financial assets accumulated in the world is held, undeclared, in tax havens. Citing Gabriel Zucman’s research, he uses this to explain the inconsistencies of international wealth balance sheets. He considers the automatic, international sharing of banking information to be the first step towards wealth taxation: in this way assets held at foreign banks could also appear in taxpayers’ pre-filled returns. In his view there is no technical obstacle to this. It already works between the banks and tax authorities of large countries; the main resistance comes from tax havens. Piketty describes the full liberalisation of capital movements as a direction increasingly questioned since the 2008 crisis, one that was implemented without the possibility of information exchange. In this framework, the Hungarian exit tax is effective if NAV can follow the emigrated taxpayer’s assets through automatic data exchange throughout the entire deferral period. This is why proposal 3.2 links the deferral to a public country list and annual statistics.

📖 Source: Thomas Piketty: A tőke a 21. században / Capital in the Twenty-First Century (Kossuth Kiadó, 2015)

6.4.3 World Bank: World Development Report 2015

One chapter of the report examines the role of social norms and describes paying taxes as conditional cooperation. According to the report, the expected penalty does little to explain differences in willingness to pay taxes between countries and over time:

“When people feel that the tax system is fair and that others are obeying the law, they are much more likely to comply with their obligations. […] Auditing crackdowns that emphasize penalties may have exactly the opposite of the intended effect, if the increased sanctions »cue« the idea that evasion is widespread.”

In other words: if people feel the tax system is fair and see that others also obey the law, they are much more likely to fulfil their obligations. Enforcement campaigns built on penalties may achieve exactly the opposite effect if they suggest that tax evasion is widespread. In the Hungarian package this matters in two places. For the exit tax, compliance is helped if the rule is predictable and does not disproportionately penalise moving within the EU (3.2). For the special taxes, it is helped if the path is foreseeable and not rewritten year after year (3.3).

📖 Source: World Bank: World Development Report 2015 — Mind, Society, and Behavior (2015)

6.5 International comparison

Article 5 of the EU Anti-Tax Avoidance Directive (ATAD, 2016/1164/EU) prescribes a mandatory exit tax, but only for corporate taxpayers, when they transfer their assets or seat to another state. For transfers within the EU or EEA, this tax can also be paid in instalments over five years. There is no EU rule for private individuals; member states operate their own systems, Germany and France for example for decades. Since 2022, Germany has also applied instalment payments spread over seven years for moves within the EU, instead of the earlier open-ended deferral. With its deferral until realisation, the Hungarian proposal is more lenient than this, if Portfolio’s summary is accurate.

The limit comes from EU law. Article 49 of the Treaty on the Functioning of the European Union (TFEU) protects freedom of establishment, Article 63 the free movement of capital, and Article 21 the free movement of EU citizens. In the French de Lasteyrie du Saillant case (C-9/02, 2004), the Court of Justice of the European Union found a tax due on emigration, with deferral allowed only against a guarantee, to be contrary to freedom of establishment. In the Dutch N case (C-470/04, 2006), it accepted a system involving deferral. It ruled, however, that a decline in value after emigration must be taken into account if the receiving state does not take it into account. Attila Kövesdy himself acknowledged to Portfolio that the rules of several countries did not pass the Court’s test. This is why the value-decline correction in proposal 3.2 is not a concession but a condition for the law’s defensibility.

International relatives of the tax credit, such as the US Earned Income Tax Credit (EITC), are refundable: anyone who does not pay enough tax receives the difference in cash. According to HVG, this negative taxation is alien to the Hungarian system. Proposal 3.1 therefore does not ask for this, but for pricing deduction from contributions, which already works today for the family allowance.

Economy

  • G8 — Progressive taxation of capital income
  • G3 — Simplification of the tax system and progressive reform
  • G7 — Wealth inequality monitoring
  • G20 — Economic-policy impact assessment system (Drucker audit)
  • G22 — Financial stability monitoring and shadow-banking regulation

Social policy

  • SZ9 — Public monitoring of wealth inequality
  • SZ1 — Targeted support

Demography

  • DM2 — Impact assessment of family support
  • DM5 — Differentiated family policy

Agriculture

  • MG2 — Agricultural data platform

Proposed new programme point: Exit tax with EU-law safeguards and annual NAV statistics — for the Economy area.

6.7 List of sources

Press sources (MIAK press monitor, 28 October 2026 — topic 3):

Knowledge-base references (literature):

  • 📖 John Stuart Mill: Principles of Political Economy (1848)
  • 📖 Thomas Piketty: A tőke a 21. században / Capital in the Twenty-First Century (2015)
  • 📖 World Bank: World Development Report 2015 — Mind, Society, and Behavior (2015)

MIAK internal materials:

  • MIAK policy area: Economy (programme points; programme point ID: G8, G3, G7, G20, G22)
  • MIAK policy area: Social policy (programme points; programme point ID: SZ9, SZ1)
  • MIAK policy area: Demography (programme points; programme point ID: DM2, DM5)
  • MIAK policy area: Agriculture (programme points; programme point ID: MG2)
  • MIAK press monitor, 28 October 2026 — topic 3, score: 88/100

Supplementary public data and legal sources:

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