The proposed tax package of the TISZA program in practice

The main difference between the TISZA program and current Hungarian practice is that so far fiscal balance has been ensured to a significant extent through inflation, consumption (VAT) revenues, and sector-specific taxes, whereas the TISZA program aims to achieve fiscal room for manoeuvre from non-fiscal sources: namely through eliminating corruption and reclaiming EU funds. The goal of the TISZA program is to reduce taxes on work and entrepreneurial activity, as well as to create a fairer tax system.

What can be inferred from the TISZA program regarding taxation? A path toward a fairer tax system

The main points of the program:

• Changing the current flat-rate personal income tax system

• introduction of a wealth tax

• VAT policy does not include a general tax rate reduction, but rather targeted measures to alleviate the cost of living

According to the program, the costs of the measures would not be covered by traditional tax increases, but

rather by eliminating corruption, unlocking EU funds, improving financing conditions, and introducing a wealth tax.

However, it is important to note that the program only sets out general directions and does not constitute draft legislation. The details of the tax changes – and thus their substantive impacts – will become known in the first months of governance. Further details can be found in our newsletter.