The Budget of 2016, drafted in the spirit of calculability, predictability and consistency, is more than purely a financial plan: it is the most important pillar of creating a civic Hungary. It is important to enable every Hungarian to experience financial stability, predictable fiscal management and the effects of economic growth. Next year, everybody will make some progress.

The Government has earlier today submitted the 2016 Budget Bill to the National Assembly, which is expected to start the debate of the document at the end of May and adopt it in the last week of June. This will enable those involved to prepare for next year and size up fiscal manoeuvring room.

DownloadPhoto: Gergely BOTÁR

In the drafting of the Budget Bill, the key priorities of the Government were to maintain fiscal stability, keep the general government debt level on an ascending path, further reduce budget deficit, improve employment and underpin improving economic performance. This will empower the Government to leave more money at families and within the economy compared to previous years: next year, the personal income tax rate will fall from 16 percent to 15 percent, VAT on pork will drop from 27 percent to 5 percent, several duties and fees will be lowered or abolished and the bank tax rate will also be cut.

DownloadPhoto: Gergely BOTÁR

The amount of family tax allowance will increase in case of those with two children next year, and this incentive is set to double by the end of the decade. The children food programme will be continued, as the Government wants to see no starving children in Hungary. Through the extension of the public work scheme, more and more people will be given the option to get rid of welfare benefits and return to work. EU funding will be used mainly for economic development and job creation, while a significant amount will be allocated for social and educational purposes. The Government continues to guarantee to preserve the value of pension benefits, while – through a reformed welfare system -- it also takes responsibility for the most socially deprived people who are disabled or cannot find a job. 

The 2016 Budget Bill is based on 2.5 percent GDP growth and 2 percent fiscal deficit. The general government debt-to-GDP ratio is projected to fall to 73.3 percent next year.

(Ministry for National Economy)