Economy & Policy

All you need to know about government measures to protect the economy

Prime Minister Orbán introduced numerous rules aimed at protecting the Hungarian economy from the negative effects of the coronavirus.

PM Orbán introduced the first economy protection action plan on March 19, 2020, to help businesses protect themselves from fallout from the coronavirus epidemic. Those measures not only imposed a moratorium on all loan repayments for individuals and companies until the end of this year but extended short-term business loans until June 30. 

Furthermore, the interest rate on all new consumer loans is now capped at a maximum of the central bank’s base rate plus 5 percent, meaning rates can be no more than 5.9 percent.

Employers in sectors that have been – and will continue to be –  hardest hit by the pandemic are exempt from paying payroll taxes until June 30. These sectors specifically include tourism, hospitality, entertainment, culture, sports and transportation. Employees will also see a reduction in their required tax contributions, including a moratorium on pension contributions, and health insurance premiums will be capped as well.

Another group feeling the sting from the coronavirus is taxi drivers, and those drivers operating under the small taxpayer enterprise category (KATA) will now be exempt from paying their fixed monthly taxes until June 30. The new measures instituted by the government also forbid the termination of rental contracts and place a moratorium on rental price increases. Additionally, tourism development contributions are suspended until June 30, and employment laws will be made to be more flexible.

The latest measures added to the economy protection action plan just last week include an exemption from paying their fixed monthly tax payments for more than 81,000 sole proprietors and businesses registered to pay the Itemized Tax for Small Businesses (KATA) until June 30. This affects primarily those in the service sector, including hairdressers, cosmeticians, plumbers, gas-fitters, carpenters, sports trainers, painters, electricians, performing artists and outpatient care providers.

As with tourism and hospitality, media service providers will be spared any loss in advertising revenue. Evictions and the forfeiture of property are suspended until the end of the emergency. And tax enforcement is also suspended, with people able to pay any remaining tax debts after the end of the emergency.

Furthermore, mothers on maternity leave will be able to remain at home to care for their children until the state of emergency is over.

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