“Hungary is not only amongst the world’s frontrunners based on the results it has achieved within the field of epidemiological protection, but it is also performing outstandingly to combat the damaging economic effects of the coronavirus pandemic. In addition to bank debtors, the economy protection measures the government has introduced during the coronavirus crisis have helped some one million employees, hundreds of thousands of enterprises and over ten thousand university students”, the Ministry of Finance’s Parliamentary State Secretary, András Tállai informed Hungarian news agency MTI.

In addition to the fact that practically everyone, from businesses to families and students, is included among the beneficiaries of the economy protection measures, the government’s action plan has also contributed to stopping the shrinking of the Hungarian economy that occurred in April and May, and to enable it to return to its previous growth trajectory in recent months”, he explained.

“The 9200-9500 billion forints (EUR 26.6 – 27.5 billion) that represents the total budget for the measures is a significant sum even in international comparison”, the State Secretary emphasised. From among the measures, he highlighted the internationally exemplary moratorium on loan repayments, which could leave some two trillion forints (EUR 5.8 billion) in the pockets of bank debtors. “Beneficiaries also include small children and pensioners. The elderly are affected most seriously by the epidemic both physically and emotionally, in view of which the government has decided to restore the 13th month pension. The concession for families with small children, which extends eligibility for the various maternity and childcare benefits during the state of emergency, could help some 60 thousand parents”, he added.

Mr. Tállai also spoke about tax-related measures, which not only meant immediate assistance to enterprises during the crisis, but have also significantly contributed to mitigating economic damage. “In view of the epidemic, the government decided to bring forward the reduction in the rate of social contribution tax to 15.5 percent to 1 July. The two-percentage-point reduction will be leaving 160 billion forints (EUR 463 million) with employers until the end of the year. The tax concessions also affect SMEs, in view of the fact that the rate of small business tax will be cut from 12 percent to 11 percent from the beginning of next year”, he pointed out.

“Sectors that found themselves in difficulties have received immediate and direct assistance. The various tax concessions (the waiving of itemised tax payments for four months for individual entrepreneurs, and the four-month contributions concession for enterprises) have enabled over 360 thousand people to keep their jobs and enterprises”, the State Secretary highlighted.

“Tax administration has also been reduced: The fact that the deadline for the submission of annual financial statements and corporate tax returns has been extended by four months to 30 September represents a major concession for enterprises. The liquidity of enterprises is being facilitated by the fact that the tax office has switched to the more rapid transfer of VAT rebates. The government has further expanded the Hungarian payment concession system, which was already unique in international comparison, with two further measures especially in view of the pandemic”, he explained, listing the most important concessions.

Mr. Tállai pointed out that several tax measures have helped the tourism industry, which has been particularly hard hit by the coronavirus epidemic. From among these, he highlighted the exemption from having to pay the tourism development contribution and the reduction of the level of contribution payments on “Szép-card” employee benefits from 32.5 percent to 15 percent, as well as the doubling of the maximum sum that may be transferred to the card.

“Funding development projects is one of the administration’s priority tasks, and accordingly the government decided that the profits re-invested by enterprises and individual entrepreneurs should be fully exempt from any tax obligations”, he stated. “The government is not only promoting investment via the tax system, but also directly, and has already authorised over 500 billion forints (EUR 1.46 billion) in investment promotion funding from its budget”, he added.

According to Mr. Tállai, one of the greatest results of the rapid and targeted economy protection measures is that the government has succeeded in tangibly reducing the number of job seekers, and Hungary remains one of the European Union’s member states with one of the lowest rates of unemployment. He also pointed out that the wage subsidy programs, the new loan opportunities and training programs provided by the Economy Protection Action Plan and the various tax concessions have helped over a million employees to date.

(Ministry of Finance)