Hungarian minimum wage earners have to pay the highest taxes in the world

The Hungarian tax system has been the subject of much criticism as it tends to favor wealthier citizens. However, there are discounts for those who earn the least in Hungary.

Hungarian minimum wage earners have the highest tax burden

The annual report of the International Labor Organization (ILO) contains information on taxation in Hungary. They looked at minimum wage taxation in 42 countries. According to their analysis, the tax burden on minimum wage earners is the highest in Hungary in the world, reports Only Germany has higher taxes, but several US member states, as well as Belgium, impose less tax on minimum wage earners.

High earners pay particularly low taxes

While the poor struggle to pay huge sums of money, the wealthier class enjoys particularly low taxes. Out of 154 countries and territories, Hungary has the 59th lowest tax rate for high earners, writes Among European countries, only similar or less developed countries (Albania, Montenegro, Moldova, Bulgaria) apply lower taxes. The only developed country that applies income taxes similar to Hungary is New Zealand. However, there are also discounts for people with low incomes.

Being single and poor is the most expensive thing in Hungary

Hungarian taxpayers who live alone and have no children pay a particularly high amount of tax. There is no other developed country where a childless worker earning half the average salary would have to pay such a high tax burden as in Hungary. Those earning half the average salary have to pay 1.6 times the typical average among OECD members from their salaries to public expenditure. Even in Belgium, which imposes the highest tax burden in the world, it is much better to be fiscally poor than in Hungary. Belgian workers who earn half the average wage pay a third less in taxes and contributions than Hungarians.

Family support

Although people living in Hungary have to pay high taxes, there are also reductions. The government expresses its support to families in the form of family support money. As of 2009, it is 12,000 HUF (€28.26) per month for a child, 13,300 HUF (€31.33) for two children, and 16,000 HUF (€37.69) for three or more children. However, this remains shockingly low according to the OECD report. A family with an average income pays more tax on its income in Hungary than the average in developed countries.

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Laura T. Thrasher