Pensioners and VAT refunds: will the significant amount remain a dream?

Refunds will be small

According to Tamás Katona, an advisor to the Coordinating Council of Pensioners’ Organizations, only those who spend a significant amount on vegetables and dairy products each month will be able to receive a significant refund. According to his estimates, a pensioner would have to spend 40,000-60,000 forints on vegetables and fruit to receive a noticeable refund. Given that the monthly pension of most seniors does not reach 200,000 forints, this expense is out of reach for many.

According to data from the Central Statistical Office (KSH), an average household spends only 1.2% of its consumption on milk and 2.4% on vegetables and fruit. This means that someone who spends 200,000 forints per month would spend 2,400 forints on milk and 4,800 forints on vegetables. Based on this, the amount of the refund would barely exceed 1,000 forints per month.

In the shadow of inflation

Food prices in Hungary have increased by 63.1% in the past three years, while overall inflation was 39.6%. In light of this, the amount of the VAT refund seems negligible for pensioners, whose shopping options are becoming increasingly limited.

The refund would be received by those entitled to it via a card, from which they would receive the amount either by transfer or in cash together with their pension. However, the exact details have not yet been made public.

Questionable effectiveness

Although the measure aims to improve the financial situation of pensioners, experts say it may be a communication tool that does not actually provide significant help. For most affected people, the refund will be negligible and will not alleviate the burden of significant food price increases.

For pensioners, the VAT refund may therefore be a symbolic step at best, with little practical benefit. Real help could come from measures that significantly reduce the price of basic foodstuffs or increase the real value of pensions.