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Hungary Plans Controversial Advertising Tax

By Ulrika Lomas, Tax-News.com, Brussels

09 June 2014


The Hungarian Advertising Association (MRSZ) says there is "unprecedented professional unity" against plans to introduce a tax on revenue from advertising.

Hungary's Minister for National Economy, Mihály Varga, said on radio recently that the tax was "very likely" to be introduced, and a draft bill has been put forward by a lawmaker with the ruling Fidesz party. If the bill is passed, media organizations would face one of six rates, reaching 40 percent on revenues of HUF20bn (USD89m). The tax will be calculated based on revenue, rather than profit.

János Lázár, who heads the office of Prime Minister Viktor Orbán, confirmed that the Government would seriously consider the bill. He said that media companies need to contribute more to the public burden, and that revenues from the tax would be used to fund improvements to the education system.

Lázár also denied that the proposal was an attack on media freedom, and he accused the German television operator RTL, which would be hit the heaviest, of "blackmail" after threatening to leave the country.

Plans for a tax on advertising were previously put forward last year. At that time it was suggested as a measure to help Hungary exit the European Commission's Excessive Deficit Procedure, although that goal was achieved shortly afterwards and the proposal was put on hold.

The MRSZ has brought together 60 organizations for a protest. Media organizations are expressing opposition to the tax by leaving pages blank in newspapers and suspending broadcasts for a 15-minute period.

TAGS: tax | European Commission | Hungary | law | Europe | Economy

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