According to the government’s proposed amendments to the tax code, the tax allowance for children could be deducted from benefits paid by employees from 2014. As a result of the regulation, families with three or more children who pay less income tax than the maximum allowance would from next year have higher net incomes.

The amendment to be discussed in Parliament favours families with wages slightly below the average wage. The disposable income of households with three or more children with lower than average incomes would increase by up to 20 per cent. Depending on the number of children, families with above average incomes would be only minimally or not affected at all by this new regulation.

Through the tax code, the government is supporting the better off, Iván Várkonyi comments in Népszabadság on the proposed tax code amendments. The left-wing columnist notes that while households on the minimum wage will take home only 13,000 Forints more, middle class families can have a disposable income nearly 60,000 Forints higher. He contends that the allowance will not help families with less, but will rather support middle class households which are not in need. As a result, the “semi-feudal” tax code could entrench inequality, Várkonyi concludes.

In Magyar Nemzet, Tamás Jakubász welcomes the government’s proposal to extend family tax allowances to benefits. The conservative commentator points out that families need help otherwise Hungary’s demographic decline will continue. Higher birth rates, however, need more than a favourable tax system, Jakubász adds. In addition to extending tax allowances to benefits, the welfare system, education, and security should be improved in order to stimulate higher birth rates, Jakubász writes.

Source: BudaPost

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