If you drive a taxi in Budapest, invoice clients as a freelancer, or run a small side business next to your job, you may soon be able to use Hungary’s KATA flat tax again. There’s a catch, though. The monthly flat rate is set to go up, and nobody yet knows by how much.

Prime Minister Péter Magyar set out the plan in a speech in Szolnok, following a similar pledge from Finance Minister András Kármán in June. For many self-employed workers, the decision is no longer whether KATA is convenient. It is whether it still pays.

What is changing in the KATA plan

KATA (the small taxpayers’ itemised lump-sum tax) lets eligible self-employed people pay one fixed monthly amount instead of handling several separate taxes and contributions. According to Világgazdaság, the proposed changes would:

• let KATA payers invoice companies and organisations again, not only private individuals;
• readmit side-job entrepreneurs, pensioners and university students;
• raise the annual revenue cap from HUF 18m to HUF 19m;
• increase the current HUF 50,000 monthly flat tax, either in one larger step or two smaller ones. The new amount has not been set.

How high could the monthly rate go?

There is no official figure yet, but tax expert József Angyal has given a useful benchmark, as reported by Pénzcentrum. When KATA started in 2013, the minimum wage was HUF 98,000 and the contribution base for KATA payers was HUF 81,300, or 83% of it. In 2026 the minimum wage is HUF 322,800, while the KATA contribution base is still HUF 108,000 a month. That is just 33% of the minimum wage.

Angyal calculates that if the base were brought back in line with the minimum wage, it would be HUF 267,924, which works out to a monthly tax of HUF 124,585. He argues that a monthly KATA of HUF 130,000, taking the 2027 minimum wage rise into account, would be no more than a proportional correction.

Angyal has also suggested a 40% tax on invoicing above HUF 6m a year to a single client, aimed at disguised employment. He has floated a basic annual revenue band of HUF 12m, with 40% charged on anything above it. These are an expert’s proposals, not government policy, but they show which way the debate could go.

Why taxi drivers are watching closely

About two-thirds of Hungary’s taxi drivers work in Budapest, where fares are officially fixed. That matters because you can’t simply raise your prices to cover a higher tax. Any increase comes straight out of your take-home pay.

“KATA is currently one of the most preferred forms of taxation among taxi drivers, so any further cost increase could really cut to the bone.”

That is how Metál Zoltán, president of the Országos Taxis Szövetség (National Taxi Association), put it to Világgazdaság. He also pointed out that almost every full-time taxi business is affected, because higher fares push annual revenue up quickly. That revenue, he warned, says little about how much is actually left in the driver’s pocket.

This is why the association says an annual cap of HUF 20 to 22m would be justified. It would match the VAT exemption threshold, which is HUF 20m in 2026 and rises to HUF 22m in 2027. The association said it had not been consulted but was open to talks. Főtaxi said it would not comment on the possible burden or market effects until the final rules are known.

What you get back: the pension and benefits side

A higher tax is not all cost. Your benefits as a KATA payer are currently calculated on a base of HUF 108,000 a month, which is low if you ever need sick pay or when you reach retirement. The taxi association has said it would back a higher KATA if social security and pension entitlements improve as well.

So when the final figure comes out, look at both parts: what you pay each month, and what protection you get in return.

How to check whether KATA still works for you

• Know your real annual revenue. If you are close to HUF 19m, a single good year could push you over the cap.
• Work out two scenarios. Compare your yearly cost at HUF 50,000 a month with the cost at around HUF 130,000 a month, then compare both with regular self-employed taxation.
• Count your fixed costs. Starting or returning taxi entrepreneurs need an investment of HUF 7 to 10m, so look at your margin, not just your turnover.
• Check your client mix. If most of your invoices go to one company, watch for any single-client limit in the final rules.
• Weigh the paperwork. Low admin is a real benefit. Put a value on your time before you switch to a more complex regime.

Don’t decide yet, but get ready

The final rate, cap and timing are still open, so there is no reason to change your tax status today. Gather your revenue and cost figures now. Then, when the government publishes the details, you can work out your real take-home pay in an afternoon instead of guessing. Talking to an accountant before the new rules take effect is a sensible step, especially if KATA has been your main way of working.