Hungarian government levies special tax on ads

The governing party Fidesz and far-right nationalist Jobbik party have passed a bill on a new advertising tax to be imposed on media companies, publishers, billboard users and online advertisers. The rest of the oppsoition voted against the bill. Experts claim the measure is politically motivated.

As the financial web site portfolio.hu reports, the progressive levy is payable on revenues and the rates go higher as revenues rise. The first payment will be due already in August and Fidesz estimates it brings in HUF 8-10 billion a year.

Portfolio.hu quotes the Hungarian Association of Advertisers that stressed in a statement that professional organisations object to the advertising tax. They are enraged arguing that the passing of the bill was rushed, it was preceded by no social reconciliation whatsoever and there is no real, acceptable justification for its imposing. The tax "could have unforeseeable consequences for the entire communications industry," it warned, adding that the expected economic benefits of the new levy are dwarfed by the economic disadvantages it will create.

The Association also noted that the media sector has been already contributing to public burden sharing via various taxes and that it is unfair that the bulk of the new levy would be paid by a single business, the most popular national TV channel RTL Klub. The Association requested the government to publish the relevant impact studies and also asked President János Áder not to sign the law and refer it back to Parliament for reconsideration.

According to a last-minute modification of the bill by the governing party, the tax base for 2014 may be reduced by half of last year’s deferred losses - a move that clearly favours RTL Klub rival TV2, recently acquired by people said to have pro-government affiliation. Opposition politicians and media experts claim the introduction of this special tax is to punish RTL Klub that has not been 'conquered' by the government.