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Covid-19 recovery package briefing

Covid-19 newsletter
7 April, 2020

On 7 April 2020 the Hungarian government has launched its new recovery package which they hope to give a boost to the economy.

The government has now announced their recovery programme to answer the Covid-19 pandemic. So far we have the communique, and the detailed legislation is expected to be introduced soon.


  • the government will take over the wages of employees in 70 per cent, “to a fair extent” for 3 months, but only if “the employees are not at home” and work in shortened working times
  • those working in engineering, research and development will receive a 40 percent wage subsidy over the next 3 months, which is not tied to part-time work;
  • they are planning to introduce administrative changes that will make work planning more flexible, an entrepreneur portal will be launched, where entrepreneurs can ask questions and manage their affairs;
  • postpone the submission of annual accounts until 30 September, introduce a guarantee waiver in the EKÁER system and provide for the possibility of automatic repayment;
  • speed up VAT refunds, for regular taxpayers from 75 days to 30 days, for reliable taxpayers from 30 days to 20 days
  • introduce special payment facilities such as installment payment, payment deferral, tax reduction by simplifying procedures and forms;
  • introduce not to penalize taxpayers classifications (risky and reliable taxpayers) in the event of possible defaults during the state of emergency;
  • sick leave documents can also be submitted to employees in electronic form,
  • they want to create as many jobs as the virus "destroys",
  • a series of simple tender schemes will be introduced "for companies that, in addition to retaining their employees, want to invest or change their technology during this period, want to switch to environmentally friendly solutions that reduce their consumption, for example" hundreds of billions of forints the state is dedicated to this, “we want to see the Hungarian economy as a high-tech and green economy,”;
  • the government will launch training that responds immediately to corporate downtime, retraining employees who are not currently needed in companies, immediate online training such as “IT training” to retrain redundant workers, and 95 per cent of tuition fees will be subsidized, and those who have lost their jobs, provide a 0 per cent ‘adult student loan’ to cover retraining;
  • university students, who are now falling from their career start, can take a one-time free-use zero percent inerest loan of HUF 500,000;
  • from 1 July 2020, the social contribution tax will be reduced by 2 percent;
  • workers sent on unpaid leave are also covered by social security, "the worker can pay the EKHO tax afterwards";
  • diplomas are awarded without a language examination, which affects roughly 75 000 people who have completed their studies but are unable to take their degree due to the language test obligation;
  • tourism tax will be suspended until the end of the year, renovation support will be provided to hospitality companies, and tourism will be supported with a total of HUF 600 billion;
  • the social contribution tax of the Szép Card will be reduced to 4% by 30 June, and the frame amount will be increased too, from HUF 450,000 to HUF 800,000 in the private sector, from HUF 200,000 to HUF 400,000 in the public sector;
  • set up loan guarantee capital programs, accessible to micro, small and medium-sized enterprises, to provide liquidity; There will be HUF 2,000 billion worth of loans, HUF 500 billion worth of state guarantees;
  • with the help of capital programs, they want to protect domestic assets, the “nation’s engine enterprises,” partly from the crisis caused by the coronavirus, partly from hostile takeovers;
  • some examples of new loan and guarantee programs: Széchenyi job retention loan, Eximbank mitigation loan program, MFB competitiveness loan program, Agrár Széchenyi card overdraft;
  • some of the funds managed by Széchenyi Fund Management Hiventures and Eximbank will be restructured in order to protect domestic companies through these funds;
  • new funds will also be launched, the Restructuring Sub-Fund will provide a lifeline for strategic companies in difficulty, the Transaction Sub-Fund will allow companies to buy companies and real estate at home and abroad, there will also be an SME Rescue Sub-Fund and a Restart Sub-Fund;
  • would like to support distressed sectors, such as tourism, creative industries, health, agriculture, construction, food, transport and logistics, in part through investment subsidies, support for infrastructure development and favorable loans and guarantees;
  • would also like to support the health industry to a greater extent, would like the products of domestic companies, pharmaceutical factories and device manufacturers to appear in a much larger proportion on the domestic market;
  • establish the Health Industry Innovation Agency, which will be responsible for coordinating the medical research activities of universities and private companies, otherwise the Hungarian state has already provided funding for a number of research projects;
  • from January 2021, “the 13th month pension will be gradually rebuilt”, in addition to the January pension, pensioners will receive a one-week pension, and “this will happen in 2022, 23 and 24 as well”, for which the government provides HUF 280 billion;
  • extend the deadlines for GYOD, allowing parents raising a chronically ill or severely disabled child to cease to be entitled to a higher amount of family allowance until the second month after the end of the emergency;
  • entitlement to family allowance does not last until the last day of the 2019/2020 school year, but until the end of the emergency;
  • modify favorably the reduced deadlines for recipients of pensions and pension-like benefits;

According tot he government,the state provides an amount roughly 18-20 percent of the GDP (currently HUF 9,200 billion) to protect the economy, and this amount may increase.