Hungary reports budget deficit reduction amid new tax plans and retail disputes

The Hungarian government has reported progress in reducing its central budget deficit, which fell by 210 billion Forint in September 2026 compared to the previous year. Over the last four months, the budget balance improved by a total of 1,200 billion Forint due to the cessation of unnecessary spending. However, the Költségvetési Tanács has lowered the country's GDP growth forecast from 4.1 percent to 2.0 percent, citing geopolitical tensions and rising energy prices.

Prime Minister Péter Magyar has announced a new wealth tax effective January 1, 2027. The tax will impose a 1% rate on assets exceeding 1 billion Forint and a 1.5% rate on assets exceeding 100 billion Forint, aiming to generate 800 billion Forint in revenue. The International Monetary Fund (IMF) has recommended that Hungary reduce its budget deficit to 3% of GDP by 2029.

Simultaneously, the retail group Spar has filed a new complaint with the European Commission regarding Hungary's special retail tax. Spar argues that recent changes to the tax law, which allow large retailers to potentially avoid the tax by splitting into multiple companies, are “absurd and a harassment.” The company stated that such forced changes to corporate structures are illegal under EU law and noted that Hungarian authorities may not recognize restructuring motivated primarily by tax avoidance.