OPTEN: Why were sole proprietors in focus in the new tax package?

A quiet, yet significant restructuring has begun in the domestic entrepreneurial space in recent years. The number of sole proprietors has been continuously increasing, and by October 2025 it reached 646,000, of which 557,000 are active. This further strengthened the 2024 turnaround: there are more active sole proprietors operating in Hungary than corporate enterprises. The 11-point package that has just been adopted can, in several ways, reduce administrative burdens and improve predictability for small players by adapting to this trend.

What is behind the phenomenon? – Economic adjustment with social movements

The rise of the sole proprietorship form is not simply the result of economic rationality. The growing need for independence among younger generations, the demand for flexible working, the persistent presence of home offices and the spread of project-based work are all pushing employees to take greater control over their own activities. Self-employment is no longer a forced path, but a decision that fits modern labor market patterns.

Meanwhile, on the economic side, the permanent burden on social enterprises – higher operating costs, more complicated rules, slower adaptability – marked the point where more and more people were looking for a smaller, cheaper and more flexible form of business.

How does all this show up in the numbers?

According to OPTEN data, the number of sole proprietors has increased by nearly 90 thousand since 2020, reaching 646 thousand by 2025. However, the growth is not only quantitative: the number of active entrepreneurs increased to 557 thousand, and the suspension rate decreased from 16 percent last year to 13.7 percent. This means that there are not only more sole proprietors, but they are operating more stably.

Sectoral data show that the dynamics are broad-based. There are almost 95,000 sole proprietors operating in the field of professional, scientific and technical services, and the number is similarly high in other services. In these areas, project-based operation and flexible working fit closely with the EV model, so growth is not temporary, but rather a permanent pattern.

The 11-point tax package – Relief comes where growth is greatest

The government package also contains several amendments that directly ease the burden on sole proprietors. The gradual increase in the threshold for individual VAT exemption provides greater room for maneuver in areas where the income structure is typically service-based and predictable. Reducing the contribution burden of full-time sole proprietors – especially the reduction of the social security fund – will reduce the largest fixed monthly cost for many.

The simplification undertaken by NAV, which automatically completes the reporting of insured persons and imposes a less frequent reporting obligation, can mean significant administrative relief for those who simultaneously perform professional and business-related tasks.

“Based on the data, the role of sole proprietorships has noticeably increased. The recently adopted tax and administration reduction measures can make the operations of the smallest players more predictable, which can help stabilize entrepreneurial activity. In the coming period, the decisive factor will be whether these changes bring tangible relief to everyday operations.”

– said Csaba Alföldi, company information expert at OPTEN.