By Emmanuel Nduka
Hungary’s parliament has approved a new law granting lifetime income tax exemptions to mothers of two or more children, in a bid to combat declining birth rates.
Under the legislation passed Tuesday, women under the age of 40 with two children will be exempt from paying income tax starting next year. The benefit will be gradually extended to all mothers with at least two children by 2029.
Mothers of three will begin receiving the tax exemption as early as October this year.
This initiative is part of Prime Minister Viktor Orban’s broader strategy to encourage population growth, which has included subsidized family loans, housing support, and tax breaks for mothers of four or more children.
Orban has called the initiative “Europe’s biggest tax reduction programme,” aimed at turning Hungary into a “family tax haven.”
However, economists warn the plan comes with a hefty price tag, an estimated 2.38 billion euros ($2.71 billion) by 2029.
Critics also argue the measures are a pre-election tactic, as Hungary prepares for polls next year.
Hungary’s fertility rate has steadily declined, falling to 1.31 in March from a high of 1.61 in 2021. The government hopes to raise the rate to 2.1 by 2035 to halt the country’s population decline.
