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The Hungarian Parliament has rubber-stamped the income tax exemption for all Hungarian employees under 25 years old, seen as a new pillar in the conservative government’s pro-family policies, Minister for Family Affairs Katalin Novák announced on her Facebook page.
‘We support the start of life for young people. We have now passed a bill in Parliament to allow tax exemptions for young people under the age of 25,’ Novák wrote.
The Hungarian government promised the tax exemption back in January, and at the time, Finance Minister Mihály Varga, said it would cost the budget about 100 billion forints (€277 million) in lost tax revenue but that the social impact of the exemption is a much more pertinent consideration.
‘I say again, tax revenue is a small aspect of this, an important aspect of course, but only a small aspect, since the long-term goal is for a young person to feel connected to their own country, find their place here, in this economy, and hopefully have children,’ said Varga.
The tax exemption follows in the footsteps of Poland, with Poland’s ruling Law and Justice party (PiS) introducing income tax exemption for under-26 employees earning less than 85,528 zlotys (€19,000 pa) on Aug. 1, 2019.
Novák also said that the tax exemption dovetails with the tax break for young married couples, which kicks in at the age of 25. Parliament approved the change with 166 yes votes, one no and zero abstentions.
Hungary has pursued an extensive pro-family policy in the country, which has successfully increased birth and marriage while reducing divorces. A number of countries have expressed their interest in Hungary’s policies to alleviate their own internal demographic problems, including Japan, which faces one of the most rapidly ageing populations in the world.
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