BUDAPEST, Oct. 19 (Xinhua) -- Hungarian Prime Minister Peter Magyar on Monday unveiled his government's 2027 budget framework, targeting a sharp reduction in the fiscal deficit while introducing substantial tax cuts, higher social benefits and increased public spending.
The government aims to reduce the budget deficit from an estimated 7.5 percent of gross domestic product (GDP) in 2026 to 4.9 percent in 2027, despite announcing approximately 2.1 trillion forints (6.5 billion U.S. dollars) in additional spending and tax relief, according to Magyar's speech to parliament.
The government plans to achieve the deficit reduction primarily through cuts in public expenditure, reforms to state procurement and additional tax revenues. It expects to save a further 1.5 trillion forints (4.63 billion dollars) in 2027 by reducing administrative costs, eliminating inefficient spending and reviewing public contracts.
Magyar said that the personal income tax rate on minimum-wage earnings would fall from 15 percent to 9 percent starting January 2027. Family allowances will double from next year, benefiting more than one million families with approximately 1.6 million children. The budget framework also includes pension increases, public-sector salary increases, and healthcare spending increases.
To help finance the measures, the government plans to introduce a wealth tax on billionaires, expected to generate 200 billion forints (about 618 million dollars) annually. It also intends to raise the current 9-percent corporate tax rate by several percentage points for large companies with annual revenues exceeding 180 billion forints (about 556 million dollars).
The proposed budget measures are now pending the parliament's approval before taking effect in 2027. ■