Hungary Rolls Out Major Tax Relief Package Worth $272 Million to Support Small Businesses

BUDAPEST, Nov. 17, 2025 — Hungary introduces a tax relief package worth up to 90 billion forints, roughly $272 million, to support small businesses nationwide. Prime Minister Viktor Orban said the package will help firms navigate economic stagnation, preserve jobs, and bolster business confidence. The measures expand eligibility for the small business tax system and provide financial support to thousands of retail and service enterprises.

The plan widens tax brackets for around 3,500 retail businesses without changing their rates and extends eligibility to approximately 5,000 additional firms. Companies in production and service sectors are expected to benefit immediately, giving them extra resources to manage costs, retain staff, and plan for sustainable growth.

How the Package is Funded

The tax relief measures will be financed in part through a substantial increase in the bank levy, which has been doubled to 360 billion forints. Government officials say the higher contributions from financial institutions allow the relief program to support small businesses without endangering overall fiscal stability.

The package also postpones a planned excise tax hike on fuel for six months, which provides immediate relief to businesses that rely heavily on transportation and logistics. Additional measures include tax incentives for energy companies that modernize their infrastructure. These steps are designed to help businesses manage short-term costs while encouraging long-term investment and operational efficiency.

The government is pursuing this package alongside other measures such as tax cuts for families, wage increases, and food vouchers for pensioners. Officials frame these policies as part of a broader strategy to protect livelihoods and stimulate the economy amid a third year of stagnation.

Eleven Point Plan for Entrepreneurs

Hungary’s tax relief package is structured around an eleven-point plan designed to go beyond simple cuts and provide practical support for small businesses. The framework aims to reduce administrative burdens, improve cash flow, and encourage long-term investment while preserving employment in production and service sectors.

The first key measure raises the VAT exemption threshold, allowing very small firms to operate with simpler reporting and fewer obligations. This is accompanied by a simplification of reporting requirements for sole proprietors and micro-businesses, making compliance easier and less time-consuming.

Flat rate expense allowances have been increased to give small enterprises additional financial flexibility. Special relief is offered to tens of thousands of micro-businesses to ease operational pressures, especially for companies operating on tight margins. Eligibility for the small business tax system (KIVA), has been expanded to include approximately 5,000 additional firms, giving them access to lower tax rates and financial support.

The plan also postpones excise tax hikes on fuel for six months, reducing immediate costs for businesses heavily reliant on transportation and logistics. Energy companies investing in modern and sustainable infrastructure can benefit from targeted tax incentives, encouraging long-term modernization across industries.

Additional measures include steps to support family-owned and local businesses, ensuring that financial relief reaches smaller operators and preserves employment. The government has also aimed to improve administrative efficiency by streamlining registration, filing, and reporting procedures. Measures are designed to create predictable financial conditions that help small businesses plan investments and growth.

Finally, the plan incorporates broader economic incentives such as encouraging environmentally conscious modernization, supporting businesses that upgrade equipment, and providing indirect relief through related fiscal measures like family support and pensioner food vouchers. Taken together, these eleven points reflect a comprehensive approach to small business policy that addresses both immediate financial pressures and longer-term structural challenges in the Hungarian economy.

Economic Impact on Small Businesses

Immediate Effects on Micro and Small Firms: The government frames the package as both a practical support measure and part of preparations for next year’s national elections. Analysts say the package could achieve both objectives. By reducing financial pressures, it may help preserve jobs in production and service sectors while improving business sentiment.

Long-Term Challenges and Sustainability: At the same time, the doubling of the bank levy and the government’s decision to target a five percent budget deficit for the next two years raise questions about the long-term sustainability of such measures. Businesses will need to evaluate how the combination of relief, postponed excise hikes, and modernization incentives affects cash flow, hiring, and competitiveness.

Observers note that the most immediate effect will be on small firms that operate with thin margins. Easing their tax burden and providing clear administrative support could give them the breathing room necessary to stabilize operations and retain staff. If implemented effectively, the measures could foster resilience, encourage investment in infrastructure, and help small businesses navigate ongoing economic uncertainty.

The government emphasizes that supporting small businesses is essential for maintaining employment in production and services, which form the core of Hungary’s economy. Providing financial stability and incentives for modernization can strengthen the capacity of these firms to survive and thrive despite broader economic challenges.

Small businesses form the backbone of Hungary’s production and service sectors. By easing taxes and offering financial incentives, the government is helping these businesses remain financially secure, preserve jobs, and invest in modernizing their operations.

Inputs from Diana Chou

Editing by David Ryder