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András Tállai coronavirus pandemic economy Hungary News

Hungary has spent €27.4 billion on coronavirus economic relief

Tax breaks, deferred interest, jobs and direct investments

editor: REMIX NEWS
author: MTI

The HUF 9,500 billion (€27.4 billion) the Hungarian government has devoted to shield the economy from the ravages of the coronavirus pandemic is significant even in an international comparison, state minister of the Finance Ministry, András Tállai told national news agency MTI in an interview.

One of the biggest single measures the government brought this March was private individuals’ interest payments on loans was deferred, meaning this year they do not have to pay interest. Tállai said that measure alone left about HUF 2,000 billion with the population. He said that because the elderly and families with small children were the most affected by the pandemic, the government took targeted measures to help them. The cabinet decided to reinstate in four steps the extra month’s pension (the so-called 13th pension), which was discontinued by the Socialist government back in 2009. It also extended child support payments until the end of the year for those who otherwise would have no longer been eligible.

He said that enterprises have also received a relief in the reduction of their social security contributions by two percentage points to 15.5 percent from July 1. This measure has left enterprises with an additional HUF 160 billion. The government also implemented several measures to safeguard jobs: four moths’ worth of taxes have been waived for the self-employed and as of January 1, 2021 the tax on small- and medium-size enterprises will be reduced by one percentage point to 11 percent.

Tállai said that in addition to the above-mentioned general measures, the government has also introduced sector-specific reliefs targeted to the most affected parts of the economy: taxes on tourism cards (a form of cafeteria payment by companies to their employees) have been halved to 15 percent and the amount employers can contribute has been doubled.

In order to support economic growth, all enterprises will also be able to reduce their tax base for this year by the amount they reinvest in their companies. Additionally, the government has approved state development projects so far this year to the tune of HUF 500 billion. He said that besides keeping unemployment at manageable levels, these measures resulted in direct help to some one million employees.

According to the latest official data, unemployment in Hungary was 4.6 percent in the April-June period, compared with 7.1 percent in the January-June period across the European Union, and 7.8 percent in the eurozone.  

Title image: State minister of the Finance Ministry András Tállai. (Magyar Hírlap/Patrícia Bodnár)