In this European country, some people may be exempt from taxes

The Central European country is continuing its birth rate offensive. On Tuesday, April 29, the Hungarian parliament adopted a series of measures aimed at exempting all mothers of at least two children from taxes for life.

Currently, and since 2020, only mothers with four or more children benefit from this tax break. Starting next year, those under 40 will be eligible, before a gradual extension to include those over 60 by 2029, according to this legislative package adopted by a large majority.

Ultra-conservative Prime Minister Viktor Orbán, a staunch defender of "traditional" values, is thus expanding his policies aimed at halting the population decline of the Central European country, which is threatened by an aging population. Hungary has been losing inhabitants for more than 40 years: there are currently 9.5 million, compared to 10.7 million in 1980.

Free daycare, housing or vehicle purchase assistance, "baby loans"... the list of benefits has grown over the years. This strategy, which has attracted interest from conservative circles, particularly in the United States, is, however, very costly and has mixed results.

Costly measures

Announced a year before legislative elections that promise to be tight, the new measures will cost 2.3 billion euros by 2029, according to government estimates, with economists concerned about a worsening of the already high deficit and inflation.

"It's a financial challenge," Viktor Orbán acknowledged at the end of February, but "this tax reduction program, the largest in Europe," will transform Hungary into a "tax haven for families."

Will it boost the birth rate? The fertility rate fell to 1.31 children per woman in March, according to official statistics, after a peak of 1.61 in 2021, compared to a European average of 1.53.

The Hungarian leader, himself a father of five, can argue that at the time of his arrival, the rate was at a historic low of 1.23. But it is still far from the 2.1 threshold needed for generational renewal, a target that the government, forced to postpone the deadline, now hopes to achieve by 2035.