Chapter XLII: A Költségvetés Közvetlen Bevételei és Kiadásai (Direct Revenues and Expenditures of the Budget)

Overview

Chapter XLII is the structural centre of the Hungarian national budget. It is not a ministry or an institution: it is the line where the state’s entire tax base is recorded on the revenue side, and where the largest discretionary transfers — to the pension and health funds, to family policy, to the EU budget, to credit-guarantee schemes, and to the government’s own contingency reserves — are recorded on the expenditure side.

The chapter’s headline figures, from its own closing summary table:

• Total expenditure: 6,569,013.4 millió Ft (≈6,569 milliárd Ft) — domestic operating budget 5,248,721.2, domestic capital budget 531,319.9, EU development budget 788,972.3.
• Total revenue: 22,739,210.7 millió Ft (≈22,739 milliárd Ft) — the operating tax base 21,038,892.7 plus the EU development revenue 1,700,318.0.
• Chapter balance: +16,170,197.3 millió Ft.

That balance is an accounting artefact, not a surplus. Chapter XLII books the nation’s tax receipts in one place; the spending those receipts fund is distributed across the other forty-odd chapters of the budget. The chapter’s surplus is the pool from which the rest of the state is financed.

Two analytical consequences follow. First, the revenue side here is where the classical-liberal lens does its most consequential work for the whole budget: every forint of expenditure analysed elsewhere is a claim on the tax structure recorded in this chapter, and the composition of that structure — how heavily it leans on consumption taxes, how large the payroll wedge is, how many narrow sector levies it contains — determines how much the act of financing the state itself costs in foregone output. Second, the expenditure side of this chapter is dominated by transfers whose classification cannot be read off the transfer line: a transfer to the Pension Fund is a Keep or a Phase-Out depending on what the Pension Fund does, which is analysed in the social-security fund chapters, not here. Where a transfer is a pure pass-through to a function analysed elsewhere, this analysis classifies the transfer as Keep-as-transfer and flags that the substantive classification belongs to the receiving chapter; where the expenditure line is itself the discretionary decision, it is classified on its merits.

Revenue Items

This chapter contains essentially the whole of the central government’s tax revenue. The items below are grouped as the budget groups them.

Vállalkozások költségvetési befizetései (Budget payments by enterprises)

Társasági adó (Corporate income tax) — 1,258,400.0 millió Ft. Hungary’s corporate income tax is levied at a 9% flat rate, the lowest headline corporate rate in the European Union.¹ The relevant question is not the rate — which is already low — but the base. Hungary taxes corporate profit whether retained or distributed; a firm earning 100 units and reinvesting 80 still owes tax on the full 100. Estonia’s distributed-profits regime taxes profit only when it leaves the firm: retained earnings are untaxed regardless of size or duration, and the standard distribution rate is 20% (14% for regular dividend payers).² The mechanism matters because capital deepening — the single largest driver of real-wage growth — depends on the after-tax return to reinvested earnings. Hungary has the low rate; it lacks the base design that most strongly rewards keeping capital inside the firm. This is a revenue line whose architecture, not whose yield, is the reform target.

Pénzügyi szervezetek befizetései (Payments by financial institutions) — 292,000.0 millió Ft. This is the bank levy — a sector-specific surtax on financial institutions. It is one of a cluster of “extra-profit” taxes (banking, retail, energy, telecoms, insurance) that single out individual industries for additional taxation. The economic objection is not that banks should be untaxed; it is that a tax base defined by sector rather than by activity is an instrument of discretion. The yield is real; the cost is the signal it sends to long-horizon capital. Ireland’s sustained-FDI record rests on twenty-five years of regime durability — no sector-specific surtaxes, no retroactive renegotiation, no unexpected base changes — and that durability, not the headline rate, is what produced the capital deepening.³ A revenue line that exists because the state reserves the right to redefine the base by sector is a tax on predictability itself.

Cégautóadó (Company car tax) — 103,200.0 millió Ft. A levy on company-owned passenger vehicles. Routine, low-distortion within the vehicle-taxation family.

Bányajáradék (Mining royalty) — 108,000.0 millió Ft. A royalty on the extraction of state-owned mineral and hydrocarbon resources. This is closer to a genuine resource-rent charge — payment for the depletion of a commonly-held asset — than to a tax on production, and is among the least distortionary lines in the chapter.

Játékadó (Gambling tax) — 69,100.0 millió Ft. A tax on gambling turnover. Yield-stable; its distortion profile is bound up with the state’s broader gambling-concession arrangements analysed elsewhere.

Környezetterhelési díj (Environmental load charge) — 5,000.0 millió Ft. A charge on emissions and effluents. Small.

Egyéb befizetések (Other payments) — 40,700.0 millió Ft. Residual enterprise payments.

Energia ágazat befizetései (Energy sector payments) — 195,900.0 millió Ft. Another sector-specific surtax, this one on the energy industry — part of the same extra-profit cluster as the bank levy. Same objection: a base defined by sector is a base defined by discretion.

Rehabilitációs hozzájárulás (Rehabilitation contribution) — 228,800.0 millió Ft. A levy on employers above a size threshold who do not employ a mandated quota of workers with disabilities. It is, in substance, a payroll surcharge functioning as a quota-enforcement penalty: employers pay the wedge or hire to the quota. Whichever they do, the cost lands on labour — either as a direct payroll cost or as a reduced capacity to raise wages.

Kisadózók tételes adója (Itemised tax for small taxpayers, KATA) — 72,200.0 millió Ft. A simplified flat-amount regime for the smallest sole traders. Low compliance cost; a defensible simplification for micro-scale activity.

Kisvállalati adó (Small business tax, KIVA) — 303,100.0 millió Ft. A simplified regime for small enterprises that taxes a base built on personnel cost and distributed profit at a single rate. KIVA is notable for being structurally closer to the Estonian distributed-profits logic than the standard corporate tax: it rewards reinvestment by excluding retained earnings from the base. It is the part of the Hungarian tax code that already does what the corporate-tax reform above proposes.

Kiskereskedelmi adó (Retail tax) — 329,200.0 millió Ft. A turnover tax on retail trade — another sector-specific levy in the extra-profit family. A turnover tax is more distortionary than a profit tax: it is owed whether the firm is profitable or not, it cascades through supply chains, and it falls hardest on high-volume low-margin retail, which is precisely the segment that competes on price for lower-income consumers.

Szén-dioxid kvóta adó (Carbon-dioxide quota tax) — 75,000.0 millió Ft. Revenue linked to emissions-allowance arrangements.

Légiközlekedési környezetterhelési adó (Air transport environmental load tax) — 20,000.0 millió Ft. A levy on aviation. Small.

Fogyasztáshoz kapcsolt adók (Consumption-linked taxes)

This group is the fiscal core of the chapter and of the budget.

Általános forgalmi adó (Value-added tax, ÁFA) — 8,793,000.0 millió Ft. This single line — at 8,793 milliárd Ft — is the largest revenue item in the entire Hungarian budget. Hungary’s standard VAT rate is 27%, the highest in the European Union; the next-highest is Finland at 25.5%, then Croatia, Denmark and Sweden at 25%.⁴ The EU average is 21.9%.⁵

The objection to a 27% consumption tax is not that consumption should be untaxed. It is about incidence and visibility. A VAT is a tax on the worker’s wage, collected at the point of spending rather than the point of earning, and it is regressive in the only sense that matters to a low-income household: the poorer the household, the larger the share of income it must spend rather than save, and therefore the larger the share of income the VAT reaches. The standard “VAT is broad-based and efficient” defence treats the tax as if it sat lightly on a wide base; for a household at the bottom of the distribution, spending nearly all of what it earns, 27% is not a light, broad tax — it is the second-largest claim on its labour after the payroll wedge.

The visibility problem compounds this. Consider the cumulative wedge on a typical Hungarian working household, baselining on total employer cost — gross wage plus the 13% employer social-contribution tax (SzocHo) equals 100% of what employing the worker costs:

1. Payroll layer. Out of every 100 forints of employer cost, the 13% employer SzocHo, the 15% SZJA, and the 18.5% employee social-security contribution together mean roughly 37 forints reach the state before the worker has take-home pay to spend.⁶
2. Consumption layer. On the remaining take-home pay, ÁFA at 27% on most spending captures roughly a further 13–14 forints of the original 100.
3. Excise layer. Jövedéki adó on fuel, alcohol and tobacco adds 40–60% to the shelf or pump price for those categories specifically.

The cumulative effective state take from full employer compensation, for a worker who spends most of what they earn, is in the 55–60% range — not the 37% payroll wedge that appears on a payslip. The 27% headline VAT is the layer that does the most to push the total there, and it is the layer the worker is least able to see, because it is embedded in every price rather than printed on a payslip. The mainstream Hungarian debate treats the 9% corporate rate as the country’s tax-competitiveness story; the consumption side, which raises roughly four times what corporate tax raises and lands on labour, is rarely framed as a tax on workers at all.

This does not make VAT a candidate for abolition — there is no line item to cut here, and a state must be financed somehow. It makes VAT the line whose rate the prosperity-renewal programme would lower as the expenditure side of the budget shrinks. The renewal sequence is mechanical: spending falls, the financing requirement falls, and the highest-distortion, least-visible tax — the 27% rate that no other EU member matches — comes down first.

Jövedéki adó (Excise duty) — 1,796,300.0 millió Ft. Excise on fuel, alcohol, tobacco and related categories — the second-largest revenue line in the chapter. Layered on top of the 27% VAT (excise is itself inside the VAT base, so the worker pays VAT on the excise), the excise layer is what makes fuel and tobacco the most heavily-taxed items in a Hungarian household’s budget. From 2026 the fuel excise is indexed to inflation, so the layer rises automatically each year.⁷ For a working household that commutes by car, this is the third layer of the wedge described above, and the one that compounds silently.

Regisztrációs adó (Registration tax) — 22,200.0 millió Ft. A one-off tax on putting a vehicle into service. Small.

Távközlési adó (Telecommunications tax) — 50,900.0 millió Ft. A sector levy on telecoms — part of the extra-profit cluster, smaller than the bank or energy levies.

Pénzügyi tranzakciós illeték (Financial transaction levy) — 605,600.0 millió Ft. A tax on financial transactions — payments, transfers, cash withdrawals. This is among the more quietly damaging lines in the chapter, because it taxes the use of the monetary and payment system itself. Money’s function is to lower the cost of exchange; a transaction levy raises it back, at every step. The tax discourages the formalisation of payments, nudges activity toward cash, and falls on the financial deepening that a converging economy needs. The yield is large; the base is the circulatory system of the market economy.

Biztosítási adó (Insurance tax) — 220,300.0 millió Ft. A tax on insurance premiums — another sector levy. It raises the price of insurance and therefore discourages the voluntary pooling of risk, which is the function insurance exists to perform.

Turizmusfejlesztési hozzájárulás (Tourism development contribution) — 103,700.0 millió Ft. A sector levy on hospitality and tourism turnover.

Lakosság költségvetési befizetései (Budget payments by the population)

Személyi jövedelemadó (Personal income tax, SZJA) — 4,837,400.0 millió Ft. Hungary’s personal income tax is a 15% flat rate, applying to nearly all categories of income — the lowest personal income tax rate in the EU.⁶ By the standards of the classical-liberal tax-design literature, a low flat rate on income is among the better-designed taxes in this chapter: it is transparent, it does not penalise additional effort with rising marginal rates, and it does not distort the choice between income sources.

Two qualifications matter. First, the flat headline obscures a code that has become heavily carved by family status: as of 2026, mothers under 30 face no income cap on their allowance, mothers under 40 raising two children are eligible for an allowance, mothers raising three children are exempt on wage income from October 2025, and mothers of four or more are fully exempt on wage income.⁸ These exemptions are family-policy spending routed through the tax code rather than appearing as an expenditure line. They are analysed substantively as family policy in the relevant chapters; their effect here is that the 15% flat rate is, increasingly, a 15% rate for some workers and a 0% rate for others, with the difference determined by demographic category rather than by anything the worker did. A flat tax whose effective rate depends on family status is no longer a flat tax; it is a demographic-allocation instrument wearing a flat tax’s name.

Second, SZJA is only the visible 15% of the labour wedge. As set out under VAT above, the worker who sees 15% on a payslip is in fact financing the state at 55–60% of total employer cost once the employer SzocHo, the employee social-security contribution, VAT, and excise are stacked. The flat income tax is the honest, visible layer; the rest of the wedge is the part the design hides.

Lakossági illetékek (Population duties) — 319,200.0 millió Ft. Stamp and procedural duties paid by individuals — property-transfer duty, inheritance and gift duty, court and administrative fees. Transaction taxes on property transfer in particular discourage the reallocation of housing to its highest-valued use and raise the cost of labour mobility.

Gépjárműadó (Motor vehicle tax) — 108,000.0 millió Ft. An annual tax on vehicle ownership. Routine.

Egyéb költségvetési bevételek (Other budget revenues)

Vegyes bevételek (Miscellaneous revenues) — 24,139.9 millió Ft. Residual.

Centralised revenues: Bírságbevételek (Fine revenues) — 98,822.8 millió Ft; Környezetvédelmi termékdíjak (Environmental product fees) — 15,000.0 millió Ft; Egyéb központosított bevételek (Other centralised revenues) — 27,000.0 millió Ft; Megtett úttal arányos útdíj (Distance-based road toll) — 561,000.0 millió Ft; Hulladéklerakási járulékból származó bevétel (Landfill levy revenue) — 15,000.0 millió Ft; Időalapú útdíj (Time-based road toll) — 124,000.0 millió Ft; Élelmiszerlánc-felügyeleti díj (Food-chain supervision fee) — 26,800.0 millió Ft.

The two road tolls together (685,000.0 millió Ft) are among the more defensible revenue lines in the chapter: a distance-based toll is a user charge that approximates a price for road use, and prices — even state-set ones — carry more information than general taxation does.

Költségvetési befizetések (Budget payments by state bodies)

Központi költségvetési szervek (Central budget institutions) — 33,137.8 millió Ft and Nemzeti Kutatási, Fejlesztési és Innovációs Alap befizetése (Payment by the National Research, Development and Innovation Fund) — 32,192.2 millió Ft. These are intra-state transfers — money moving between budget pockets — rather than fresh taxation.

Uniós programok bevételei (EU programme revenues)

The EU revenue lines — KAP Stratégiai Terv (CAP Strategic Plan), MAHOP Plusz (fisheries), CEF projects, Egyéb programok 2021-2027 (Other 2021-2027 programmes), the Helyreállítási és Ellenállóképességi Eszköz / RRF (operating 162,713.6 + capital 418,406.4 millió Ft), and the Kohéziós Operatív Programok 2021-2027 (Cohesion Operational Programmes, operating 293,976.9 + capital 685,946.2 millió Ft) — together with Vámbeszedési költség megtérítése (34,600.0) and Uniós támogatások utólagos megtérülése (90,000.0) make up the 1,700,318.0 millió Ft EU development revenue. These are transfers from the EU budget, not domestic taxes; their availability is a function of the rule-of-law conditionality process and is outside the scope of a tax-structure analysis.

Expenditure Analysis

The expenditure side of Chapter XLII is a set of large transfers. The classification rule applied throughout: where the line is a pass-through to a function fully analysed in another chapter, it is classified Keep-as-transfer with the substantive judgement deferred; where the line is itself the discretionary decision, it is classified on its merits.

Garancia és hozzájárulás a társadalombiztosítási ellátásokhoz — Nyugdíjbiztosítási Alap (Guarantee and contribution to social-security benefits — Pension Fund)

• Current allocation: Kiadások támogatására pénzeszköz-átadás 70,000.0 + Tizenharmadik havi nyugdíj visszaépítésének támogatása 531,690.0 + Nyugdíjprémium céltartalék támogatása 24,300.0 = 625,990.0 millió Ft.

• Classification: Keep-as-transfer (Pension Fund top-up); the 13th-month and pension-premium lines flagged for substantive review.

• Rationale: The Nyugdíjbiztosítási Alap (Pension Fund) runs a structural deficit — contributions do not cover obligations — and the central budget tops it up. The general top-up to the Pension Fund honours accrued pension entitlements of people who paid into a pay-as-you-go system in good faith; that reliance is precisely the property-rights interest the classical-liberal rule-of-law principle protects, and the transfer that funds it is a Keep at the level of this chapter. The substantive question — whether Hungary’s PAYG pension architecture should transition toward funded individual accounts, on what horizon, with what bridge mechanism — belongs to the Pension Fund chapter, not here.

  Two sub-lines do warrant a flag at this chapter’s level, because they are discretionary policy decisions, not actuarial obligations. The Tizenharmadik havi nyugdíj (13th-month pension), at 531,690.0 millió Ft, is a thirteenth monthly payment fully restored from 2022.⁹ It is a universalist transfer whose per-recipient value scales directly with the recipient’s ordinary pension: a minimum-pension recipient on roughly 85,000 Ft a month receives a 13th payment of roughly 85,000 Ft; a recipient whose career earnings put their pension near 600,000 Ft a month receives a 13th payment of roughly 600,000 Ft — the same line, the same funding, a roughly sevenfold difference per recipient. The funding comes from general taxation paid disproportionately by working-age earners, including those whose own parents are on the minimum pension. The family-level reality is that a wage-earner whose grandparent receives the minimum-pension-scaled supplement is, through SZJA and SzocHo, also funding the much larger supplement of an unrelated upper-decile pensioner — and has less left to support their own family directly. The Nyugdíjprémium (pension premium), at 24,300.0 millió Ft, is a discretionary growth-contingent bonus, paid when GDP growth clears a threshold; it is policy, not entitlement. Neither is an accrued right; both are flagged for substantive treatment as discretionary transfers in the pension chapter.

Garancia és hozzájárulás a társadalombiztosítási ellátásokhoz — Egészségbiztosítási Alap (contribution to the Health Insurance Fund)

• Current allocation: Járulék címen átadott pénzeszköz 730,391.6 + Kiadások támogatására pénzeszköz-átadás 976,208.2 = 1,706,599.8 millió Ft.
• Classification: Keep-as-transfer (Health Insurance Fund top-up).
• Rationale: The Egészségbiztosítási Alap (Health Insurance Fund) is, like the Pension Fund, structurally underfunded by its own contribution base, and the central budget transfers the shortfall. Whether Hungarian healthcare should move toward the Singapore CPF-Medisave or Swiss LAMal mechanism — funded individual health accounts, mandated competing insurers, a defined benefits package — is a substantive question for the Health Insurance Fund chapter. At this chapter’s level the transfer is a Keep: it funds a function being analysed elsewhere.

Nemzeti Család- és Szociálpolitikai Alap (National Family and Social Policy Fund)

• Current allocation: Családi támogatások (family supports) 396,081.1 — Családi pótlék 304,994.3, Anyasági támogatás 5,265.5, Gyermekgondozást segítő ellátás 52,843.3, Gyermeknevelési támogatás 9,301.3, Gyermekek születésével kapcsolatos szabadság megtérítése 5,943.8, Életkezdési támogatás 13,992.0, Pénzbeli és természetbeni gyermekvédelmi támogatások 2,591.3, Gyermektartásdíjak megelőlegezése 2,149.6; Korhatár alatti ellátások (sub-retirement-age benefits) 122,093.6 — Szolgálati járandóság 87,128.7, Korhatár előtti ellátás 34,964.9; Jövedelempótló és jövedelemkiegészítő szociális támogatások 261,514.3 — Jövedelempótló ellátások 80,710.6, Járási szociális feladatok 180,803.7; Különféle térítések 23,965.3 — Közgyógyellátás 15,914.3, Egyéb térítések 8,051.0.
• Classification: Keep-as-transfer for the rights-protective and reliance-protected components; Phase-Out flagged for the discretionary family-policy components — substantive treatment in the family-policy and social-protection chapters.
• Rationale: This Fund mixes several categories that the framework treats very differently. Családi pótlék (family allowance, 304,994.3 millió Ft) is a near-universal child transfer; it is a discretionary demographic-allocation instrument rather than a rights-protection function, but its scale and the number of households relying on it make abrupt removal a reliance problem — substantive Phase-Out classification belongs to the family-policy chapter. Szolgálati járandóság (service annuity) and Korhatár előtti ellátás (early-retirement benefit) together at 122,093.6 millió Ft are legacy early-retirement entitlements of discrete cohorts admitted under closed schemes; these are reliance-protected and run off by cohort mortality — again a substantive matter for the social-protection chapter. Járási szociális feladatok (district social tasks, 180,803.7) and Jövedelempótló ellátások (income-replacement benefits, 80,710.6) include genuine last-resort support for people in involuntary hardship, the part of the social budget closest to a Keep. The honest classification at this chapter’s level is to flag the Fund as mixed and defer; what this chapter records is the transfer, not the policy.

Babaváró támogatások (Baby-Expecting / “Babaváró” supports)

• Current allocation: 276,744.6 millió Ft.
• Classification: Phase-Out (3 years).
• Rationale: The Babaváró programme provides a state-subsidised, interest-free general-purpose loan of up to 11 millió Ft to married couples where the wife is under 35; the debt is partly or fully forgiven on the birth of children.¹⁰ The budget line funds the interest subsidy and the forgiven principal. This is a demographic-allocation instrument: the state is using credit subsidy to influence household formation timing. Two mechanisms are at work. First, a subsidised interest rate is an administered price — it severs the loan’s cost from the actual cost of capital, and where credit is mispriced, capital misallocates. Second, the evidence that pronatal cash and credit transfers shift the timing of births more than the completed family size suggests the programme buys a pull-forward rather than a trend break.¹¹ The reform path: close the programme to new applicants, honour every loan already contracted in good faith — borrowers signed on specific terms and those terms are a property-rights commitment — and let the line run off as existing loans mature and their forgiveness conditions resolve. A three-year horizon reflects the run-off of the active forgiveness pipeline. The protected party is the cohort of current borrowers; the honouring mechanism is contract run-off; the bridge is funded from general revenue over the run-off years.

Munkáshitel (Worker loan)

• Current allocation: 32,711.5 millió Ft.
• Classification: Phase-Out (3 years).
• Rationale: Munkáshitel is a more recent subsidised-loan scheme for young workers. The same mechanism objection as Babaváró applies: a subsidised interest rate is an administered price that detaches the cost of credit from the cost of capital. The same reform path applies: close to new entrants, honour contracted loans, run off the line over the maturity of the existing book. Three-year horizon, contract run-off, general revenue funds the bridge.

Diákhitel konstrukciók támogatása (Student loan scheme support)

• Current allocation: 12,197.8 millió Ft.
• Classification: Nominal Freeze.
• Rationale: The line funds the interest subsidy and risk component of the state student-loan system. Student finance has a defensible rationale that the pure consumption-loan subsidies above lack: human-capital investment has a long and uncertain payoff, and a private lender cannot take an equity claim on a future graduate’s earnings, so the credit market for it is genuinely thin. That is an argument for a loan facility, not necessarily for an interest subsidy; a state student-loan scheme can be designed to be self-financing at a market-reflecting rate. Hold the line nominally while the subsidy element is reviewed against an income-contingent, cost-reflecting redesign; real erosion at 2.5% inflation reduces the line’s real weight by roughly a fifth over a decade.

Lakástámogatások (Housing supports)

• Current allocation: operating 14,535.4 + capital 423,399.6 = 437,935.0 millió Ft.
• Classification: Phase-Out (5 years) flagged; substantive treatment in the housing chapter.
• Rationale: This line aggregates housing-support instruments, the bulk of it (423,399.6 millió Ft) on the capital side. Hungarian housing subsidy has historically combined direct grants with subsidised mortgage credit; the capital-side weight here is consistent with construction-linked support. Demand-side housing subsidy is the textbook case of a transfer that capitalises into price: where supply is inelastic, a grant or a rate subsidy to buyers raises what sellers can charge, and a substantial share of the subsidy is captured by the existing owner rather than the intended recipient. The substantive classification — horizon, the distinction between demand-side subsidy and any genuine supply-side measure, the reliance interest of households with commitments already made — belongs to the housing chapter. Flagged here as a Phase-Out candidate with a five-year horizon to reflect multi-year construction and disbursement commitments; the receiving chapter sets the mechanism.

Szociálpolitikai menetdíj támogatás (Social-policy fare subsidy)

• Current allocation: 150,000.0 millió Ft.
• Classification: Keep-as-transfer; substantive treatment in the transport chapter.
• Rationale: This line compensates public-transport operators for fares foregone on statutory concessionary travel (pensioners, students, and similar categories). It is a transfer to transport operators routed through this chapter; whether the underlying concessionary-fare scheme should continue, and in what form, is a substantive question for the transport chapter. At this chapter’s level it is a pass-through.

Egyéb költségvetési kiadások — Vegyes kiadások (Other budget expenditures — miscellaneous)

• Current allocation: Kárrendezési célelőirányzat 3,600.1 + Felszámolásokkal kapcsolatos kiadások 2,500.0 + Magán- és egyéb jogi személyek kártérítése 200.0 + Egyéb vegyes kiadások 161,033.4 + 1% SZJA közcélú felhasználása 18,239.8 + Mehib és Eximbank behajtási jutaléka 30.0 + Termékdíj-visszaigénylés 2,200.0 ≈ 187,803.3 millió Ft.
• Classification: mixed — Keep for compensation/claims-settlement lines; Nominal Freeze for the catch-all Egyéb vegyes kiadások.
• Rationale: The claims-settlement and compensation lines (Kárrendezési célelőirányzat, Magán- és egyéb jogi személyek kártérítése) honour the state’s liability when its acts cause harm — a rule-of-law function, Keep. The 1% SZJA közcélú felhasználása (18,239.8 millió Ft) is the channel through which taxpayers designate 1% of their already-paid income tax to a civil-society organisation; it is not new spending but a citizen-directed allocation of tax already collected, and is the most market-like allocation mechanism in the whole chapter — the taxpayer, not an official, picks the recipient. The large Egyéb vegyes kiadások catch-all (161,033.4 millió Ft) is opaque by construction: a 161 milliárd Ft line labelled “other miscellaneous expenditures” is, from a public-choice standpoint, exactly the kind of low-visibility discretionary pool whose lack of itemisation is itself the finding. It cannot be cut on the strength of a label, but it should not be expanded; Nominal Freeze, with a recommendation that future budgets itemise it.

Állam által vállalt kezesség és viszontgarancia érvényesítése (Enforcement of state guarantees and counter-guarantees)

• Current allocation: MEHIB Zrt. 3,000.0 + Garantiqa Hitelgarancia Zrt. 45,000.0 + Agrár-Vállalkozási Hitelgarancia Alapítvány 4,000.0 + Babaváró kezességből eredő fizetési kötelezettség 4,000.0 + MFB Zrt. 1,000.0 = 57,000.0 millió Ft.
• Classification: Keep (contingent contractual liability).
• Rationale: These lines provision for guarantees the state has already issued — if a guaranteed borrower defaults, the state pays. The provision is a real liability honouring a real contract; it cannot be cut without abrogating commitments the state made to lenders who relied on them. What the framework does object to is the issuance of new state guarantees: a state credit guarantee is an off-balance-sheet subsidy that distorts lending by socialising downside risk. That objection belongs to the credit-guarantee scheme chapters, where the flow of new guarantees is decided. The provisioning line here is the contractual tail of guarantees already written — Keep.

Pénzbeli kárpótlás (Monetary compensation)

• Current allocation: 1,200.0 millió Ft.
• Classification: Keep.
• Rationale: Compensation for historic expropriations and injustices — a closed-class, reliance-protected legacy obligation that runs off by cohort mortality. Honouring it is a rule-of-law commitment.

Nemzetközi pénzügyi intézmények felé vállalt kötelezettségek (Obligations to international financial institutions)

• Current allocation: IBRD alaptőkeemelés 3,145.4 + Bruegel tagdíj 44.4 + IDA alaptőke-hozzájárulás 2,796.5 + egyéb kiadások 1,874.1 + CEB tőkeemelés és tagdíj 995.0 + EBRD tőkeemelés 2,623.9 ≈ 11,479.3 millió Ft.
• Classification: Keep (treaty / membership obligations).
• Rationale: Capital subscriptions and membership dues to the World Bank group (IBRD, IDA), the Council of Europe Development Bank (CEB), and the EBRD are treaty-based commitments arising from membership; they bind while the memberships hold. The Bruegel tagdíj (Bruegel membership fee, 44.4 millió Ft) is a discretionary subscription to a Brussels economic think tank — small enough that the administrative cost of contesting it would exceed the saving, but not a treaty obligation; it sits at Keep only on de-minimis grounds.

Hozzájárulás az EU költségvetéséhez (Contribution to the EU budget)

• Current allocation: 788,972.3 millió Ft (plus Árfolyamkockázat és egyéb, EU által nem térített kiadások 690.0).
• Classification: Keep (treaty obligation while membership holds).
• Rationale: Hungary’s contribution to the EU budget is a treaty obligation flowing from membership. Within a realistic political horizon it binds; classification follows the constraint. The classical-liberal framework treats EU membership itself as changeable — withdrawal provisions exist — but that is a sovereign political question outside the scope of a budget-line analysis. While membership holds, the contribution is a Keep.

Filmszakmai közvetett támogatások (Indirect film-industry support under the Motion Picture Act)

• Current allocation: 63,000.0 millió Ft.
• Classification: Immediate Cut.
• Rationale: This line funds the supplementary financing of the indirect (tax-rebate) film-support system. It is a sector subsidy: a transfer to film production financed by general taxation. There is no rights-protection function here, no constitutional precondition, and no reliance interest of the kind that protects an accrued entitlement — a film-support rebate is a discretionary industrial subsidy. The seen is a domestically-shot production and the jobs on its set; the unseen is the 63 milliárd Ft of tax that funded it, drawn from wage-earners across every sector, and the productions and firms in other industries that did not receive a comparable subsidy and competed on unsubsidised terms. The argument that the rebate “pays for itself” through induced activity is the candle-makers’ argument: every subsidised industry can point to the visible activity its subsidy supports while the diffuse cost to everyone else stays invisible. The line can be eliminated in a single budget cycle; productions with rebate claims already accrued under existing law are honoured as a contractual matter, but no new commitments are made.

Alapok támogatása (Support to funds) — Bethlen Gábor Alap, Központi Nukleáris Pénzügyi Alap

• Current allocation: Bethlen Gábor Alap támogatása operating 75,243.6 + capital 3,844.8 = 79,088.4; Központi Nukleáris Pénzügyi Alap 53,974.7.
• Classification: Bethlen Gábor Alap — Phase-Out (3 years); Központi Nukleáris Pénzügyi Alap — Keep.
• Rationale: The Bethlen Gábor Alap funds support to ethnic-Hungarian communities beyond the borders — cultural, educational and community grants. The grant-allocation function is a discretionary subjective allocation by political officeholders: officials decide which organisations, in which communities, receive which sums, and there is no market price or contributor signal to discipline the mix — no operational test for whether 79 milliárd Ft reaches higher-valued uses than 40 milliárd or 120 milliárd Ft would. Phase the line out over three years, allowing in-flight multi-year grant commitments to run their course; the protected party is the grantee organisations with current commitments, the honouring mechanism is grant run-off. The Központi Nukleáris Pénzügyi Alap (Central Nuclear Financial Fund) is categorically different: it provisions for the decommissioning of nuclear facilities and the long-term management of radioactive waste. That is a protective response to irreversible involuntary harm — the magnitude and irreversibility of nuclear contamination make safe decommissioning a matter of rights, not preference — and the fund is the mechanism that ensures the money is set aside before the liability falls due. Keep.

Központi tartalékok (Central reserves)

• Current allocation: Céltartalékok 749,275.0 + Közfeladatot ellátó intézmények rezsikompenzációja 228,229.9 + Rendkívüli kormányzati intézkedések (operating 98,486.3 + capital 93,513.7) 191,999.0 + Az állami vagyon növelését szolgáló tartalék 1,000.0 + Védelmi tartalék 1.0 + Árfolyam-kiegyenlítési Alap 1.0 ≈ 1,170,505.9 millió Ft.
• Classification: Keep for genuine general reserves; Nominal Freeze flagged for the discretionary-intervention reserves.
• Rationale: A prudent general contingency reserve is a defensible feature of a budget — unforeseen events occur, and a reserve avoids mid-year emergency borrowing. The Céltartalékok (earmarked/target reserves, 749,275.0 millió Ft) and the small Védelmi tartalék and Árfolyam-kiegyenlítési Alap sit at Keep on that basis, with the standard caveat that “earmarked reserve” should mean earmarked: a 749 milliárd Ft target-reserve line invites the same itemisation recommendation as the Egyéb vegyes kiadások catch-all. The Rendkívüli kormányzati intézkedések (extraordinary government measures, 191,999.0 millió Ft) is a different instrument: a reserve spent at executive discretion outside the normal appropriation process. From a public-choice standpoint a large discretionary-intervention pool weakens the budget’s function as a parliamentary check on the executive — it is appropriation without the appropriation. It cannot be zeroed (genuine emergencies need a response), but it should not grow; Nominal Freeze, with the recommendation that its use be reported to parliament item by item. The Közfeladatok rezsikompenzációja (utility-cost compensation for public institutions, 228,229.9 millió Ft) compensates schools, hospitals and similar bodies for energy costs; it is a within-state transfer that belongs analytically with the institutions it funds, and is held at Nominal Freeze pending the energy-cost normalisation those chapters address.

Smaller operating lines

Eximbank Zrt. kamatkiegyenlítése (Eximbank interest equalisation) — 106,000.0 millió Ft: the line subsidises the interest rate on export credit channelled through Eximbank. It is an export subsidy delivered as an administered interest rate — the same mispriced-credit mechanism as the household loan schemes, applied to exporters. Phase-Out (3 years) flagged, with substantive treatment in the state-financial-institutions chapter; contracted credit lines run off, no new subsidised commitments. Peres ügyek (Litigation, 2,000.0) and Tőkekiegyenlítés (Capital equalisation, 364.0) and Követeléskezelés költségei (Receivables-management costs, 1.5): routine, Keep. Gyermek és ifjúsági balesetbiztosítás (Child and youth accident insurance, 100.0): a small statutory insurance line, Keep on de-minimis grounds.

Chapter Summary

The classification below covers the expenditure lines analysed on their merits in this chapter. Pure pass-through transfers to functions analysed in other chapters (Pension Fund top-up, Health Insurance Fund top-up, the National Family and Social Policy Fund, the social-policy fare subsidy) are recorded as Keep-as-transfer and shown separately, because their substantive classification belongs to the receiving chapter and counting their savings here would double-count against those chapters. Housing supports (Lakástámogatások) are separately classified as Phase-Out (flagged, mechanism deferred to the housing chapter).

Classification	Count	Total (millió Ft)
Immediate Cut	1	63,000.0
Phase-Out	5	932,479.5
Nominal Freeze	4	593,460.1
Keep	8	1,692,828.7
Keep-as-transfer (deferred to receiving chapter)	4	3,287,245.1
Total expenditure (chapter)	22	6,569,013.4

Phase-Out lines: Babaváró 276,744.6; Munkáshitel 32,711.5; Bethlen Gábor Alap 79,088.4; Eximbank kamatkiegyenlítés 106,000.0; Lakástámogatások 437,935.0 (flagged, deferred for mechanism). Of these, the four classified on their merits here (Babaváró, Munkáshitel, Bethlen Gábor Alap, Eximbank) total 494,544.6 millió Ft; Lakástámogatások is shown in the Phase-Out count but its 437,935.0 is held against the housing chapter, so the Phase-Out total above sums the four merits-classified lines plus Lakástámogatások as flagged. Nominal Freeze: Diákhitel 12,197.8; Egyéb vegyes kiadások 161,033.4; Rendkívüli kormányzati intézkedések 191,999.0 (within Központi tartalékok); Rezsikompenzáció 228,229.9 — note Központi tartalékok is split across Keep and Nominal Freeze; figures are apportioned by sub-line.

Year-1 saving from the merits-classified Immediate Cut and Phase-Out lines: the film-support cut delivers its full 63,000.0 in year 1; the four subsidised-credit and grant Phase-Outs deliver their first-year net saving per the schedules in the JSON. Total year-1 saving from chapter-merits lines is recorded in the JSON summary block.

Revenue	Total (millió Ft)
Domestic operating tax revenue	21,038,892.7
EU development revenue	1,700,318.0
Total chapter revenue	22,739,210.7

Key Observations

• This chapter is where the cost of financing the whole budget is set. Every forint analysed as expenditure in the other forty-odd chapters is a claim on the tax structure recorded here. The composition of that structure — not the headline figures — is the finding. Hungary raises roughly 8,793 milliárd Ft from VAT, 1,796 milliárd Ft from excise, and 4,837 milliárd Ft from personal income tax. Consumption taxes alone raise close to twice what personal income tax raises, and they land on labour.

• The labour wedge is the chapter’s central mechanism, and it is mostly invisible. A worker sees 15% SZJA on a payslip. The real claim on full employer cost — employer SzocHo plus SZJA plus employee social-security contribution, then 27% VAT on what is spent, then 40–60% excise on fuel and tobacco — runs to 55–60% for a typical working household. The mainstream debate celebrates the 9% corporate rate and the 15% flat income tax; the layers that do the heavy lifting are the consumption taxes the worker cannot see. Naming the full wedge, baselined on total employer cost, is the single most important move this chapter makes available to the whitepaper.

• The 27% VAT is the rate the renewal sequence lowers first. There is no VAT line to “cut” — a state must be financed. But the highest standard VAT rate in the European Union is the highest-distortion, least-visible, most-regressive layer of the wedge. As the expenditure side of the budget shrinks, the financing requirement shrinks, and the 27% rate is the first rate that should come down. The sequence is mechanical, not aspirational: lower spending, lower financing need, lower the worst tax.

• The “extra-profit” tax cluster is a tax on predictability. The bank levy (292,000.0), the energy-sector levy (195,900.0), the retail tax (329,200.0), the telecommunications tax (50,900.0) and the insurance tax (220,300.0) define their base by sector rather than by activity. The yield is real; the cost is the signal. Ireland’s sustained capital deepening rests on twenty-five years of a tax base no government redefined by sector. A code that reserves the right to surtax whichever industry is currently profitable taxes long-horizon investment itself.

• The corporate tax has the EU’s lowest rate and a base that under-rewards reinvestment. Hungary’s 9% headline corporate rate is the lowest in the Union — and the reform target is not the rate but the base. A distributed-profits design on the Estonian model taxes profit only when it leaves the firm, leaving retained earnings untaxed. Hungary’s own KIVA regime already moves in that direction; the standard corporate tax does not. Capital deepening is the prosperity mechanism the mainstream Hungarian debate most consistently leaves out, and the corporate-tax base is one of the levers that bears directly on it.

• The subsidised-credit lines misprice capital. Babaváró (276,744.6), Munkáshitel (32,711.5) and Eximbank interest equalisation (106,000.0) all deliver a subsidy as an administered interest rate. An administered rate severs the loan’s cost from the cost of capital; where credit is mispriced, capital misallocates. The reform is identical across the three: close to new entrants, honour every loan already contracted in good faith, run the line off over the existing book.

• The expenditure side is dominated by transfers whose classification belongs elsewhere. Roughly 3,647 milliárd Ft of this chapter’s expenditure is pass-through to the Pension Fund, the Health Insurance Fund, the family-and-social-policy fund, the transport fare subsidy, and housing support — each analysed substantively in its own chapter. Counting their reform savings here would double-count. The honest move is to record the transfer, flag the substantive question, and defer. What this chapter classifies on its merits is the discretionary spending it itself decides: the film subsidy, the subsidised-credit schemes, the cross-border community fund, and the executive-discretion reserves.

• Two large lines are opaque by construction. “Egyéb vegyes kiadások” at 161,033.4 millió Ft and “Céltartalékok” at 749,275.0 millió Ft are, respectively, a catch-all and an earmarked-reserve pool of a scale that should be itemised. Neither can be cut on the strength of a label; both should be itemised in future budgets so that parliament — and the taxpayer — can see what a 161 milliárd Ft “miscellaneous” line and a 749 milliárd Ft reserve actually fund. Low-visibility discretionary pools are where the public-choice exposure of a budget concentrates.

Sources

Footnotes

1. Corporate Tax Rates in Europe, 2026. Tax Foundation. 2026. https://taxfoundation.org/data/all/eu/corporate-tax-rates-europe/. (“Hungary has the lowest corporate income tax rate in Europe at 9 percent.”) ↩

2. Estonia — distributed-CIT regime. Estonian Tax & Customs Board; OECD Tax Database (as compiled in prompts/case_studies.md, Domain 4.1). Standard distribution rate 20%, reduced 14% for regular dividend payers; retained earnings untaxed. ↩

3. Ireland — sustained predictable low CIT. IDA Ireland, “Annual Report and Accounts 2023.” IDA Ireland. 2024. https://www.idaireland.com/annual-report-2023. (Records sustained FDI inflows over 25+ years of a stable 12.5% trading-income rate; notes regime consistency as a key investor signal.) See also: Irish Fiscal Advisory Council, “Fiscal Assessment Report.” IFAC. 2024. https://www.fiscalcouncil.ie/fiscal-assessment-report-june-2024/. (Discusses the structural contribution of the stable CIT base to Ireland’s capital stock expansion.) ↩

4. 2026 VAT Rates in Europe / EU VAT Rates by Country. Tax Foundation. 2026. https://taxfoundation.org/data/all/eu/value-added-tax-vat-rates-europe/. (“The EU countries with the highest standard VAT rates are Hungary (27 percent), Finland (25.5 percent), and Croatia, Denmark, and Sweden (all at 25 percent).”) ↩

5. 2026 VAT Rates in Europe. Tax Foundation. 2026. https://taxfoundation.org/data/all/eu/value-added-tax-vat-rates-europe/. (EU average standard VAT rate 21.9 percent; lowest is Luxembourg at 17 percent.) ↩

6. Hungary — Individual — Taxes on personal income. PwC Worldwide Tax Summaries. 2026. https://taxsummaries.pwc.com/hungary/individual/taxes-on-personal-income. (“The PIT rate is 15% in the case of nearly all types of income.” Employee social-security contribution 18.5%, employer social-contribution tax 13%.) ↩ ↩²

7. Tax changes in Hungary from 2026. Accace News Flash. 2026. https://www.accace.com/tax-changes-in-hungary/. (Excise duty on petrol and diesel indexed to inflation from 2026.) ↩

8. Tax changes in Hungary from 2026: personal income tax allowances. Accace News Flash. 2026. https://www.accace.com/tax-changes-in-hungary/. (Mothers under 30 — no income cap on the allowance from 1 January 2026; mothers under 40 raising two children eligible from 1 January 2026; mothers raising three children exempt on wage income from 1 October 2025; mothers of four or more fully exempt on certain income including wage income.) ↩

9. Hungary re-introduces the 13th-month pension. European Commission — Employment, Social Affairs & Inclusion. (Reintroduction planned in four annual stages to 2024; full 13th monthly benefit paid to all entitled pensioners from 2022 onward.) ↩

10. Babaváró hitel 2026: feltételek, igénylés, visszafizetés. Portfolio.hu. 2026. https://www.portfolio.hu/bank/20260111/babavaro-hitel-2026-feltetelek-igenyles-visszafizetes-tudnivalok-es-valtozasok-810097. (Interest-free general-purpose loan up to 11 millió Ft for married couples, wife under 35; debt reduced or eliminated on the birth of children; maximum 20-year term.) ↩

11. Academic demographic research on Central European pronatalist programmes consistently finds that subsidised-loan and cash transfers shift the timing of births — advancing births that would have occurred later — rather than raising completed cohort fertility. For Hungary specifically see: Spéder Zsolt, “A termékenység emelkedése Magyarországon — lehetséges magyarázatok,” KSH Népességtudományi Kutatóintézet (2021); and Dániel Vignoli et al., “The causal effect of economic uncertainty on fertility in Europe,” Population and Development Review (2020) for the broader pattern. ↩