The draft bill would force non-governmental organisations receiving "considerable" foreign funds to reveal the exact amount.
"Hungarians should know for example if the foreign financing of a civil organisation's activity is more than 5 to 10 percent of its budget," Lajos Kosa, leader of the Fidesz parliamentary group, told reporters in Budapest.
If an NGO does not disclose the information, "it will not be able to continue its activity," and could have its tax number suspended, he said.
The draft bill, details of which have yet to be published, is to be submitted around April, according to a schedule on the parliament's website.
Hungarian NGOs have long felt the heat under Prime Minister Viktor Orban, but they now fear that the self-declared fan of US President Donald Trump will turn the screws even tighter.
According to Hungarian branch of the Helsinki Committee, a human rights group critical of the government's refugee policies, NGOs are already under strict obligations to report annually on their funding, both domestic and foreign.
"The planned legislation is a political campaign tool aimed at discrediting independent, government-critical NGOs," Andras Kadar, the Hungarian branch's co-head, told AFP in an email.
Last month, the deputy head of Fidesz, Szilard Nemeth, accused NGOs -- in particular groups backed by the Hungarian-born billionaire George Soros -- of interfering in Hungary's politics.
He said "fake" civil organisations should be "cleaned out" of the country, though government officials later denied that Hungary was about to expel any group.
After Orban's re-election in 2014, dozens of groups supported by Norway were investigated by government auditors over alleged financial irregularities.
None were found, but the enquiries -- echoing pressure on NGOs in Russia under President Vladimir Putin -- prompted former US president Barack Obama to warn Hungary against a "clampdown" on civil society.
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