It was clear already at the end of the 1980s that the chances for growth in the socialist community ran out and the Soviet Union weakened during the period of perestroika, not only in military but also in economic terms. Catching up, for approximating the two different economic systems and opening the economy required a transparent internal price system, an income policy that can be measured and influenced through indirect instruments and definitely a value added type taxation system that is used in the EU. Surely, since the structure of income deriving from taxes was outdated, primarily the corporate sector paid 63.2 % of the taxes. In addition, it was also time to reform the whole tax administration procedure. Once the necessary political decisions were made, the tax reform was worked out in order to introduce a unified, rule of law based normative taxation system as well as to implement public burden sharing that is more just in social terms and that makes the income transparent and taxes it at its very source. In return, however, it promised a bigger say in the re-distribution of public funds. The Hungarian taxation-related literature generally dealt with the background to the reform in 1988 and the contradictory impact of the allowances attached to the applied social political considerations, mainly up to the mid-1990s, generally with regard to specific tax types. The analysis of the changes in the past 30 years is deficient, the emphasis was generally laid only on the size of tax revenues, on analyzing the current situation of the state budget and the impacts of tax allowances.