Hungarian government plans to broaden KATA tax scheme for small entrepreneurs
Prime Minister Magyar Péter announced that the KATA flat-rate tax will be reopened to a wider group of small business owners, including retirees, students and part-time workers, starting in 2027.
Prime Minister Magyar Péter used a Facebook video to detail a new package of tax reforms, including an expansion of the KATA flat-rate system. The government intends to make KATA accessible again to a broad spectrum of small entrepreneurs, such as retirees, students and those with secondary jobs, with the changes taking effect from 2027. Under the revised rules, full-time KATA users will pay a higher monthly contribution than part-timers, and the annual revenue limit will increase to 22 million for full-time and 18 million for part-time participants.
The reform also restores the right to invoice corporate clients, a privilege removed in 2022, and aligns the social-security base with the minimum wage by 2028. Existing KATA participants as of the end of 2026 will transition to a stepped-up contribution schedule, while the old scheme will be phased out by 2029. The adjustments aim to curb hidden employment while improving benefits such as sickness and parental allowances.
Why it matters
The reform could affect hundreds of thousands of small business owners and reshape Hungary's tax and social-security landscape.
How the sides frame it
LOW AGREEMENTLeft-leaning coverage simply reports the details of the KATA expansion, while right-leaning coverage questions whether the plan truly helps small businesses and highlights a possible tax increase.
LEFT
Left-leaning coverage presents the KATA reform as a factual expansion of benefits for retirees, students, and part-timers, noting higher contributions for full-time users and restored invoicing rights.
RIGHT
Right-leaning coverage frames the reform skeptically, asking if the government really creates new opportunities or merely imposes a significant tax hike that could offset the intended relief.
The left emphasises
- the reform will make KATA accessible again to a broad spectrum of small entrepreneurs
- full-time users will pay higher monthly contributions while revenue limits rise to 22 million (full-time) and 18 million (part-time)
- the right to invoice corporate clients is restored and the social-security base will align with the minimum wage by 2028
The right emphasises
- the announcement includes a "significant tax increase"
- skepticism about whether the government truly creates new opportunities for small businesses
- reference to KATA’s 2013 introduction as a successful Orbán-government measure, implying the new changes may undermine that success
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