Hungary’s new “kata” tax regime, set to be implemented, will not be as advantageous as the tightened regulations of 2022 when compared to the tax burden on average wages. However, it will be significantly more favorable than when the “kata” was first introduced in 2013. This difference in tax rates raises concerns that the new system may incentivize undeclared employment practices within Hungary. Experts suggest the relatively lower tax could encourage individuals and businesses to operate "off the books" to avoid higher tax obligations. The government aims to simplify the tax system with this change, but the potential for increased hidden employment remains a significant issue. The new "kata" represents a compromise, attempting to balance simplicity with fairness in the Hungarian tax landscape.