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Dramatically Reduced Ad Tax Will Still Be Highest In Europe, Government Claims

Ferenc Sullivan 2015.04.10.

The government has proposed for the controversial advertisement tax to be maximised at 5.3 per cent.

Total revenue for central budget from the levy is estimated at 7-8 billion forints (EUR 27m). Minister of State for the Prime Minister’s Office János Lázár told a press conference it was not yet decided whether there should be businesses included in a zero bracket. “There’s no final decision on that,” he said, adding that the government’s aim was to avoid making the tax too onerous for small and medium-sized businesses. It will consult with the European Commission on the matter, he added. The commission would most likely approve the instalment of a bracket within the 0-5.3% band, Lázár said. He said that the government is expected to submit a draft to parliament next week and a vote will be held in April or May. “There will be an ad tax in place in Hungary, even if some businesses will be exempted, and that tax will be the highest in Europe,” Mr. Lázár said.

Hungary introduced the ad tax last year. The highest bracket of the progressive tax was 40% and applied to annual revenue above 20 billion forints. This bracket was increased to 50% this year. German-owned media company RTL Group turned to the European Court of Justice over the tax.

Previously, the government considered the introduction of a 0 per cent bracket to support smaller media enterprises and sports associations and a 5-6 per cent rate to apply to all other advertisers. However, the introduction of this concept would also have placed larger firms at an advantage, leading to the adoption of the flat 5.3 per cent maximum rate.

via hungarymatters.hu and hirado.hu
photo: origo.hu/Zsolt Tuba