Hungary tax reforms 2026

In late July 2026 the Hungarian government introduced a series of fiscal measures aimed at easing household costs and reducing business tax burdens.

On 28 July Prime Minister Magyar Péter announced a steep cut to the value‑added tax on firewood, lowering the rate from 27 % to 5 %. The reduction targets roughly 1.5 million low‑income households that rely on firewood for heating and will be applied automatically at the point of sale from the autumn heating season. Finance Minister Kármán András estimated an average annual saving of about 24 000 HUF per family, while the state foregoes roughly 15 billion HUF in revenue.

Three days later, on 31 July, a broader tax‑reform package was unveiled. The carbon‑quota tax was abolished, retail tax rules were relaxed, customs procedures were streamlined through electronic declarations, and several ancillary taxes are slated for removal in January 2027.

The reforms also formalised the elimination of the 5 % VAT on prescription medicines, a measure that took effect on 1 September 2024. The zero‑rate is projected to cut drug prices by about 4.8 % (roughly 56 forint per box). Fidesz MP Takács Péter criticised the step as modest and insufficient relative to earlier campaign pledges.

Overall, the package reflects a shift toward targeted relief for vulnerable consumers and a simplification of the tax and customs regime for businesses.