Budapest – Hundreds of lawyers gathered in the capital on Tuesday to denounce the government’s draft amendment to the KATA tax scheme, saying the proposal sidelines the legal profession and threatens their business model. The protest was organized by the Hungarian Bar Association, which accused policymakers of abandoning lawyers in the new plan.
Background on the KATA system
The KATA ("Kisadózó vállalkozások tételes adója") regime, introduced in 2017, offers a flat‑rate tax option for small‑scale entrepreneurs and freelancers, allowing them to pay a single monthly fee instead of multiple taxes. The scheme has been a cornerstone of Prime Minister Viktor Orbán’s economic policy, aimed at simplifying tax compliance and encouraging informal sector formalisation.
Lawyers' grievances and the Bar Association’s stance
According to the Hungarian Bar Association (Magyar Ügyvédi Kamara), the latest draft alters the eligibility criteria for KATA in a way that would force many solo practitioners and small law firms to abandon the flat‑rate option. The association said the changes were drafted without consulting the legal community, leaving lawyers "abandoned" by the government.
"Lawyers feel abandoned by the new KATA proposal, the Hungarian Bar Association said," the association’s statement read.
Bar officials argued that the proposed adjustments could increase administrative burdens and tax liabilities for lawyers who have relied on KATA’s predictable costs. They warned that the shift might push practitioners toward the more complex general tax system, potentially reducing the number of affordable legal services available to the public.
The protest featured speeches from senior bar members and a march past the Ministry of Finance. Participants carried placards demanding a transparent review process and direct dialogue with legislators. While the demonstration was peaceful, organizers said the timing was intended to pressure lawmakers before the draft’s parliamentary reading later this month.
Government representatives have not yet responded publicly to the lawyers’ complaints. The draft amendment is part of a broader effort to tighten fiscal oversight and expand the tax base, measures that have drawn criticism from various professional groups for their perceived impact on small businesses.
Legal experts note that any alteration to KATA could have ripple effects across Hungary’s service sector, where many freelancers and small firms depend on the regime’s simplicity. The bar’s protest underscores the tension between the government’s revenue goals and the interests of professional service providers.
Observers say the outcome of the parliamentary debate will be closely watched by both domestic and international business communities, as Hungary’s tax environment is a key factor in its attractiveness to foreign investors.
