Part I — Situation overview

Between 20 and 22 September 2026, several budgetary decisions and announcements that at first sight seem unrelated came to light. According to HVG’s analysis of 21 September, the Tisza government needs to find about 2,500 billion forints in 2027 in order to meet both the EU deficit-reduction path and its election promises at the same time. According to the bill submitted by the Government — if Parliament adopts it — the excise duty on tobacco products will rise from 1 November, at rates that differ by product. Based on Portfolio’s summary, the Government expects roughly 90 billion forints of additional revenue from this in 2027, for health purposes. On 21 September the Government withdrew its earlier decision on the 12-billion-forint expansion of the Pázmány Péter Catholic University’s dormitory on Farkasvölgyi út. The investment was decided back in 2021, as part of the post-pandemic economic restart action plan, but it never started and no payment was made. Under the transitional rules in force, the VAT on new homes will rise again to 27 per cent from 2027. On 22 September Attila Kövesdy, State Secretary for tax policy at the Ministry of Finance, announced that the Government would introduce a broad-based wealth tax of 1 per cent above a threshold of one billion forints. And from January, the credit introduced in the personal income tax (SZJA) will help those on lower incomes. On the spending side, according to the Prime Minister’s announcement at the end of August, the minimum old-age pension will rise to 120 thousand forints from January 2027; the decree has not yet been published.

The steps fit into a longer series. According to HVG, it is a break with previous practice that the Government submitted a supplementary budget to Parliament during the year and does not embellish this year’s deficit. MIAK’s analysis of 9 September (A record deficit of which 124 billion is the real figure) asked for the separation of one-off and permanent items and for a spending review timetable, and that of 13 September (Five thousand billion in the Treasury account) for a breakdown of the sources of the Treasury reserve. MIAK discussed the constitutional conditions of the wealth tax in June (Wealth tax and budget review), the wealth investigation on 18 September (Wealth investigations of politicians), and the phase-out of the margin cap and targeted energy support yesterday (Margin cap: a published phase-out calendar). A new development on the financing side is that on 23 September the European Commission proposed to the Council the release of 4.2 billion euros of frozen cohesion funds (24.hu, 23 September 2026) — this money, however, is an earmarked development resource and does not fill the current deficit.

MIAK’s reading: the 2027 adjustment is not arriving as a single large package, but as many small steps, each defensible on its own. The advantage of this is that no single step causes a shock; the disadvantage is that the combined distributional impact remains invisible. The burden of the tobacco tax is distributed among income groups according to consumption habits. The housing VAT burdens those buying new homes, the wealth tax the top wealth stratum, while the personal income tax credit and the minimum pension favour the lower income groups. Which social group will end up with a positive balance from these and which with a negative one, nobody can say today — even though the legitimacy of consolidation depends precisely on this.

Part II — Foundations in the literature

Four sources provide the interpretive framework. The International Monetary Fund (IMF)’s Fiscal Monitor of October 2025, based on the experience of more than two hundred spending reviews in 39 countries, records that a better spending structure allows a more gradual consolidation. The review, however, only has an effect if it is built into the start of budget planning. According to The Effective Executive by Peter F. Drucker (Austrian-American management thinker, who laid the foundations of the methodology for measuring organisational effectiveness), every organisation, and especially the state, should regularly ask the question: if we were not already doing this, would we start it now? The European Observatory volume — edited by Bernd Rechel and co-authors — shows through European examples that earmarking the tobacco tax for health purposes increases the social acceptance of the tax increase, but if the tax succeeds, the revenue declines. Pablo Gottret and George Schieber, World Bank experts, provide two propositions: on paper the burden of the tobacco tax often falls more heavily on those with lower incomes, but because they reduce their consumption more strongly, the actual effect may be different. And earmarked money easily turns into “relabelling”. The detailed discussion of the literature — by author, with quotations — can be found in section 6.4 Literature in detail.

Part III — MIAK’s concrete proposal

MIAK proposes three measurable measures. All three respond to the same gap: the steps of the 2027 adjustment currently appear separately, and neither their total balance nor their distributional impact can be seen in one place.

3.1 A public consolidation map with impact by income decile (simultaneously with the submission of the 2027 budget bill, updated before the final vote)

MIAK proposes that the Government attach a “consolidation map” to the 2027 budget bill: a single, machine-readable table that presents every revenue and spending step larger than 10 billion forints in one row. Each row should show the impact on the 2027 balance, the nature of the step (one-off or permanent), the legal basis (act, government decree, government resolution), and the impact by income tenth (decile). This breakdown shows, for households divided by income into ten equal groups, what percentage of each group’s disposable income a given step takes away or adds. The calculation should be made by microsimulation: this is a model run on a sample of households that calculates, household by household, how a tax or benefit change affects each household. The map should equally include the tobacco tax, the return of the higher housing VAT, the wealth tax, the personal income tax credit, the minimum pension and — if the Government touches it — the restructuring of the utility price reduction scheme. The methodology should be reviewed by the Fiscal Council, and the model’s source code and assumptions should be public. The proposal is a direct application of the data-driven budget programme point G1, and builds on the inequality monitoring of G7 and SZ9: the distributional impact of the wealth tax can only be measured if data on wealth deciles are available. The proposition of Gottret and Schieber (see 6.4.4) shows precisely that the distributional impact of a step does not follow from its legal form — it has to be measured.

3.2 Itemised linking of the tobacco tax surplus to health spending (from entry into force on 1 November, first quarterly report by 30 April 2027)

If the Government promises to spend the tobacco tax surplus on healthcare, then the promise should be one that can be held to account. MIAK proposes that the budget show in a separate line the additional revenue from the excise duty on tobacco products compared with the 2026 tax level, and in a separate line the health expenditures financed from it. The key is the benchmark: the surplus must be measured against a health spending path fixed in advance, without the tobacco tax increase. For if the item financed from the tobacco tax simply replaces spending previously paid from general resources, then healthcare as a whole does not receive more; only the label changes. The Ministry of Finance should publish quarterly the actual additional revenue, the stockpiling effect (according to Portfolio’s estimate, because of stocks put on the market in advance by manufacturers, this year’s surplus may be around 8–9 billion forints) and the expenditures financed. A fixed share of the surplus should go to reducing smoking and to prevention, within the framework of the E4 prevention data programme — so that the revenue and the goal measure the same thing. According to the warning of Rechel and co-authors (see 6.4.3), however, if the tax achieves its goal, the revenue declines; therefore permanent health programmes should not rely exclusively on this source.

3.3 An inventory and separate accounting of “zombie commitments” (inventory by 31 December 2026, decision on every item by 31 March 2027)

The withdrawal of the dormitory resolution is a typical example of what MIAK calls a “zombie commitment”: an earlier government commitment behind which there has been no actual implementation for years, yet which still appears as a burden in the records of general government. MIAK proposes that the Ministry of Finance publish, by the end of 2026, a list of all investment and support commitments based on government resolutions for which no payment has been made for at least 24 months since the resolution. For every item, a public, reasoned decision should be made by 31 March 2027: retention with a schedule, redesign or withdrawal. The decision question is the Drucker test (see 6.4.2): if we had not committed to it, would we start it today? Accounting is just as important: cancelling a commitment that was never paid improves the stock of liabilities, but it is not the same as an actual, cash-flow saving. On the consolidation map (3.1), these items should therefore appear in a separate category, so that the extent of the adjustment does not seem larger than it really is. The proposal applies the systematic spending review programme point G21 to commitments already made but not started, and links to the G20 impact assessment system.

The shared principle of the three proposals is that consolidation will be socially acceptable if the distribution of the burden is not a matter of guesswork after the fact, but data communicated in advance and verifiable. According to the IMF’s experience (see 6.4.1), putting the spending side in order gives the revenue side time; MIAK adds to this only that the public should also know about the order and the addressees of the steps.

Part IV — Expected effects and risks

Dimension Expected effect Risk
Budget The total balance of the adjustment is visible in one place; one-off and accounting items do not inflate the saving Preparing the map is labour-intensive, and the deadline for submission is tight
Society It becomes visible if the package burdens the lower income deciles disproportionately, and this can be corrected along the way The decile figures may enter the political debate in simplified form, as a single number
Healthcare The tobacco tax surplus becomes real spending above the baseline path, part of it going to prevention If consumption falls faster, the revenue falls short and the earmarked programme runs short of funds
Public administration Old commitments that never started are cleared from the records Ministries will defend their own items, and the inventory will progress slowly
Housing market The distributional impact of the housing VAT becomes measurable, not only the estimated price effect The map measures the income of buyers, and less so the pass-through between developers and tenants

The main question to weigh is how detailed the map should be. The finer it is, the more accurate, but the longer it takes to prepare, and the more it depends on assumptions. MIAK therefore proposes the 10-billion-forint threshold and the income decile breakdown as a starting point: this covers the overwhelming part of the adjustment and can be carried out from domestic household surveys. The second question is the extent of earmarking the tobacco tax. Full earmarking makes the budget rigid, while the absence of earmarking makes the promise empty. MIAK’s proposal lies between the two: a mandatory statement on the full surplus, and a fixed, smaller share for prevention. The third risk is political: a public map may show that certain steps burden poorer households proportionally more. This, however, is not the fault of the map — without the map the same thing would happen, it would just remain hidden.

Part V — Measurability and summary

5.1 What is worth following? (suggested KPIs)

MIAK proposes the following performance indicators (KPIs, Key Performance Indicators) for monitoring:

  • Coverage of the map: what percentage of the 2027 revenue and spending steps above 10 billion forints appear with a breakdown by income decile when the bill is submitted. Suggested target: 100%.
  • Distributional balance of the package: the net effect of the entire consolidation package as a proportion of the disposable income of the bottom three income deciles, compared with the top decile. It is worth following that the proportional burden on the lower deciles does not exceed that on the upper ones.
  • Tobacco tax linkage ratio: what percentage of the additional excise revenue appears as identified health spending above the baseline path. Suggested target: 100%, with quarterly publication.
  • Tobacco market effect: the change in legal sales of tobacco products and the estimated share of the illegal market — this indicates whether the tax increase reduces consumption or pushes it onto the black market.
  • Completion of the zombie inventory: the number and amount of commitments without payment for at least 24 months, and the share of them on which a reasoned decision was made by 31 March 2027. Suggested target: 100%.

5.2 Summary

MIAK’s request is simple: every step of the 2027 adjustment should appear on a shared, public map that shows how much it brings in and whom it burdens. The Government should account quarterly for the tobacco tax surplus, measured against a health spending path fixed in advance, and review the old commitments that never started all at once, in a single inventory — and not book their cancellation as a real saving. The “many small steps” strategy may be economically reasonable, but it remains politically sustainable only if the combined effect of the steps does not stay hidden.

Two of MIAK’s foundational values are in play here. Transparency, because in a scattered adjustment the distribution of the burden remains hidden not because of a lie but because of missing data — the map fills this gap. And accountability, because the promise that “the tobacco tax goes to healthcare” can only be held to account if revenue and spending appear in the same statement, measured against the same benchmark.

Part VI — Reasoning and further sources

6.1 Press framing by spectrum

In the economic band, Portfolio chose a technical, itemised framing. Its article on the tobacco tax breaks down the increase by product category, calculates where the minimum tax becomes decisive, and separately analyses the stockpiling effect — in other words, it represents exactly the itemised approach that MIAK asks for across the whole package. Its short news item on the dormitory decision, by contrast, essentially adopted the government statement’s wording of an “immediate balance-improving effect”, without asking what cash-flow saving stands behind a commitment that was never paid. In the outlet’s opinion section, Attila Gyurcsik, an expert at Accorde Fund Management, argued that because of the mobility of the largest fortunes, the burden of the wealth tax may ultimately be borne by the owners of domestic small and medium-sized enterprises — a concrete, measurable hypothesis on the distributional question. The interview with the chair of the Real Estate Developers’ Roundtable put predictability at the centre in connection with the housing VAT.

In the public-affairs and left-liberal band, HVG struck two different notes. Its paywalled analysis called the budget debate “number theatre” and blamed the planning errors of the previous government for the development of the deficit, while acknowledging that the new government had not started handing out money. Its real estate section, citing an analysis by Duna House, highlighted that the return of the higher housing VAT in a slowing market does not necessarily mean an immediate price rise. 24.hu tried to clear up misunderstandings around the minimum pension, while ATV highlighted the amount flowing into the budget from the fines of the Hungarian Competition Authority (GVH), as a revenue success story. In these days Telex and 444.hu approached the topic not from the budget but from the wealth investigation.

In the pro-government conservative band, Magyar Nemzet put the future of the utility price reduction scheme at the centre: it wrote that the Ministry of Finance had described the paper’s question as a “provocation”. The paper sees the dynamic electricity tariff, available from January, as the first step in the gradual dismantling of the utility price reduction scheme. From MIAK’s perspective this framing raises an important question: any restructuring of the utility price reduction scheme would probably be the step with the largest distributional impact in the 2027 package, and therefore it belongs on the map — regardless of whether one agrees with the paper’s political orientation.

6.2 Facts and data

Data Value Source
Press estimate of the 2027 adjustment need about 2,500 billion forints HVG, 21 September 2026
Entry into force of the tobacco tax increase (according to the bill) 1 November 2026 Portfolio, 20 September 2026
Planned additional revenue in 2027 roughly 90 billion forints, for health purposes Portfolio, 20 September 2026; the intended use was confirmed by State Secretary Attila Kövesdy on 22 September 2026
Expected surplus this year after the stockpiling effect around 8–9 billion forints (estimate) Portfolio, 20 September 2026
Specific duty on cigarettes (per thousand sticks) 33,690 → 36,720 forints Portfolio, 20 September 2026
Minimum duty on cigarettes (per thousand sticks) 47,140 → 59,800 forints (+26.9%) Portfolio, 20 September 2026
Duty on heated tobacco products 40 → 50 forints/stick (+25%) Portfolio, 20 September 2026
Smoking tobacco 29,270 → 32,200 forints/kg, plus a new 5% ad valorem element Portfolio, 20 September 2026
Withdrawn dormitory investment 12 billion forints, a 2021 commitment, no payment made Government statement, Portfolio, 21 September 2026
VAT on new homes 5% → 27% from 2027; 5% until the end of 2030 for projects whose building permits become final by 31 December 2026 HVG / Duna House, 21 September 2026
Theoretical VAT difference on a new home with a gross price of 100 million nearly 21 million forints (with full pass-through) HVG / Duna House, 21 September 2026
Housing market transactions in the first quarter of 2026 18% fewer than a year earlier Magyar Nemzeti Bank (MNB) data, HVG, 21 September 2026
Planned wealth tax 1% above a threshold of one billion forints, on a broad range of assets State Secretary Attila Kövesdy, Portfolio/MTI, 22 September 2026
Minimum old-age pension from 2027 120 thousand forints (announcement; no decree yet) 24.hu, 21 September 2026
Amount received from GVH fines in 2026 1,933.2 million forints GVH statement, ATV, 22 September 2026

Two remarks belong to the figures. First, the effect of the tobacco tax differs by product: the minimum duty on cigarettes rises sharply, but according to Portfolio’s calculation it only becomes decisive below a pack price of roughly 1,923 forints — in other words, the increase raises the tax content of cheaper products more. Which income group this affects most is not a matter of inference but of measurement — this is precisely what the consolidation map would supply. Second, revenues such as GVH fines are one-off and small in amount; from the point of view of the adjustment, it is the permanent items that count.

6.3 Policy dimensions

  • Economy (programme points) — an itemised, machine-readable budget, systematic spending review, ex-post impact measurement, data on wealth inequality (programme point ID: G1, G21, G20, G7, G3);
  • Social policy (programme points) — public measurement of the distributional impact, the targeting of targeted support (minimum pension, personal income tax credit) (programme point ID: SZ9, SZ1);
  • Healthcare (programme points) — spending part of the tobacco tax surplus on prevention, and its measurability (programme point ID: E4);
  • Construction (background material) — the market and distributional impact of the return of the higher housing VAT, housing market data (programme point ID: EP2).

6.4 Literature in detail

6.4.1 International Monetary Fund: Fiscal Monitor — Spending Smarter

The IMF’s October 2025 report is about the efficiency of public spending, and it offers two propositions for the current Hungarian situation. The first concerns spending reviews: according to an analysis of 222 reviews carried out in the member states of the OECD (the international cooperation organisation of advanced economies) between 1999 and 2022, the efficiency of public spending typically improves after them. The report names three good practices — concrete savings targets, a procedure led by the finance ministry and supported by experts, and building the review into the early stage of budget planning. The second proposition concerns the pace of consolidation. The report puts it this way:

“These reforms not only improve living standards but also help stabilise the ratio of public debt to income, so fiscal consolidation can proceed more gradually.”

The report is also concrete about investments: projects must be selected with a clear methodology and criteria fixed in advance, and independent review mitigates political influence. Applied to the Hungarian 2027 adjustment: the “many small steps” can only remain gradual if the review of the spending side takes place together with the budget, not after it — and if the withdrawn commitments are screened according to the selection criteria, not on an ad hoc basis.

📖 Source: International Monetary Fund: Fiscal Monitor — Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth (October 2025)

6.4.2 Peter F. Drucker: The Effective Executive

In the subsection on “sloughing off yesterday”, Drucker writes that the effective executive regularly reviews his programmes and asks the same question about every activity:

“If we did not already do this, would we go into it now?”

If the answer is not an unconditional yes, the activity should be stopped or sharply curtailed — the literature calls this organised abandonment: the systematic elimination of programmes that do not work, so that resources can flow to those that do. Drucker particularly emphasises that government programmes age just as quickly as those of other institutions, yet they are treated as eternal and soon acquire their own interest groups. According to another of his observations, what one postpones one in fact abandons: carrying out five years later what would have been smart five years earlier is an almost certain failure. The case of the Farkasvölgyi út dormitory is a textbook example of this: a 2021 decision lived on in the records for five years without implementation. The Drucker test, however, does not call for ad hoc withdrawal, but for a regular review covering every item — which is why MIAK proposes the full inventory in point 3.3.

📖 Source: Peter F. Drucker: The Effective Executive

6.4.3 Bernd Rechel et al.: Organization and financing of public health services in Europe

The volume published by the European Observatory on Health Systems and Policies devotes a separate part to taxes earmarked for public health purposes. The best-known example is spending part of the tobacco tax revenue on tobacco control programmes: citing a 2007 WHO report, the book writes that Poland, Finland and Iceland earmark 0.5, 0.75 and 0.9 per cent of the tobacco tax respectively for such purposes. The authors formulate two propositions that are in tension with each other. One is that the population is more supportive of raising the tobacco tax if it is spent on health promotion and tobacco control. The other is stated in connection with sugar taxes, but follows a logic that also applies to the tobacco tax:

“Ideally, the revenue from these taxes should be added to general revenue and not earmarked for health promotion, not least because, if they succeed in reducing consumption, the amount available for public health will decline.”

Applied to the Hungarian tobacco tax: the promise that “the surplus goes to healthcare” may increase the acceptance of the increase, but if the Government ties the entire surplus to permanent programmes, a successful tax will leave precisely those programmes without funding. That is why MIAK proposes in point 3.2 a mandatory statement of the full surplus, but earmarking of only a smaller, fixed share.

📖 Source: Bernd Rechel, Elke Jakubowski, Martin McKee and Ellen Nolte (eds.): Organization and financing of public health services in Europe

6.4.4 Pablo Gottret and George Schieber: Health Financing Revisited

The World Bank’s handbook on health financing contains two propositions directly useful in the current debate. The first concerns the distributional impact of consumption taxes: according to the authors, it depends strongly on what the individual income groups consume. The tobacco tax has proved regressive in several countries (that is, it proportionally burdened the poorer more), because poorer households spend a larger part of their income on tobacco. At the same time, the book adds that because the poorer respond more strongly to price, a tobacco tax increase causes a larger fall in consumption among them — so in terms of the actual change in the tax burden it may even be progressive. The second proposition concerns earmarked money:

“Earmarking typically increases the rigidity of government budgets and does not necessarily lead to an increase in total government spending, as the recipient country may reallocate its own domestic resources to other purposes.”

The authors call this the fungibility of money: the labelled resource may crowd out what was previously paid from general resources. Although the book describes this in the context of international aid, the logic is the same for a domestic earmarked tax. Applied to the Hungarian case, both propositions demand measurement: the distributional impact of the tobacco tax cannot be read from the text of the legislation, it can only be calculated by microsimulation (3.1), and “the tobacco tax for healthcare” only means a surplus if it is measured against a spending path fixed in advance (3.2).

📖 Source: Pablo Gottret and George Schieber: Health Financing Revisited — A Practitioner’s Guide (World Bank)

6.5 International comparison

For institutionalising spending review, Slovakia is the closest model in the region. According to the summary in the IMF’s Fiscal Monitor, the country launched its spending review project in 2016. Since then it has carried out 19 reviews, which covered nearly two thirds of total public spending and identified potential savings equivalent to 7 per cent of total spending. The report’s lesson is that a review has an effect if its timing and subject are aligned with the annual budget cycle and the medium-term expenditure framework. For the distributional statement, the United Kingdom provides the best-known example: the British Treasury publishes a household impact analysis by income decile alongside budget announcements, so that the parliamentary debate on the distribution of the burden can be based on data. For earmarking the tobacco tax, the Rechel volume cites Polish, Finnish and Icelandic practice, while the World Bank handbook notes that in France in the early 2000s 3.3 per cent of health revenues came from earmarked taxes levied on car use, tobacco and alcohol. The Czech Republic serves as a counter-example: according to Portfolio’s report of 21 September, the Czech government is raising the budget deficit target for 2027 for the third year in a row — the planned value of the annual general government deficit, set in advance as a proportion of gross domestic product (GDP). The planned deficit is 386 billion korunas, and the government promises public-sector pay rises, road development, and health and defence spending. Hungary has committed to the opposite — adjustment — but precisely for this reason it has a greater need for the distribution to be visibly fair.

Economy

  • G1 — Data-driven budget
  • G21 — Systematic review of state expenditure
  • G20 — Economic policy impact assessment system (Drucker audit)
  • G7 — Wealth inequality monitoring
  • G3 — Simplification of the tax system and progressive reform
  • G23 — Public debt sustainability framework

Social policy

  • SZ9 — Public monitoring of wealth inequality
  • SZ1 — Targeted support

Healthcare

  • E4 — Prevention data programme

Construction

  • EP2 — Housing construction data platform

Proposed new programme point: Consolidation map — a distributional statement by income decile for every budgetary step above 10 billion forints, separating one-off, permanent and accounting items — for the Economy area.

6.7 List of sources

Press sources (MIAK press monitor, 22 September 2026 — topic 3):

Related later developments (MIAK press monitor, 23–24 September 2026):

Knowledge base references (literature):

  • 📖 International Monetary Fund: Fiscal Monitor — Spending Smarter (October 2025)
  • 📖 Peter F. Drucker: The Effective Executive
  • 📖 Bernd Rechel, Elke Jakubowski, Martin McKee and Ellen Nolte (eds.): Organization and financing of public health services in Europe
  • 📖 Pablo Gottret and George Schieber: Health Financing Revisited — A Practitioner’s Guide

MIAK internal materials:

  • MIAK policy area: Economy (programme points; programme point ID: G1, G21, G20, G7, G3, G23)
  • MIAK policy area: Social policy (programme points; programme point ID: SZ9, SZ1)
  • MIAK policy area: Healthcare (programme points; programme point ID: E4)
  • MIAK policy area: Construction (programme points; programme point ID: EP2)
  • MIAK press monitor, 22 September 2026 — topic 3, score: 87/100

Supplementary public data sources:

  • Fiscal Council — opinions on budget bills
  • KSH — household budget and living conditions survey (income deciles)
  • NAV — excise tax revenues in monthly breakdown
  • MNB — housing market report, transaction data
  • Eurostat — government deficit and debt notifications (October publication)

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