FIDESZ Intimidator: Hungary passes ad tax bill

Autocratic government imposes high taxes on media:

Hungary's FIDESZ  passes ad tax bill:

"Hungary passes ad tax bill

The Hungarian parliament has given the go-ahead to a controversial advertising tax that has been widely criticised by the country’s media industry and led to public protests.

BBJ reports that the tax bill was approved in a fast-track procedure, which limits debating time, with 144 votes in favour and 30 against.

However, a late amendment said that this year’s tax bill could be reduced by 50% for media companies reporting losses from earlier years.

This, argue critics, favours the national commercial broadcaster TV2, which they argue supports the ruling party Fidesz.

The new graduated tax will come into effect in 31 days and require media companies making between HUF500 million (€1.64 million) and HUF5 billion pay 1% of their tax revenue in tax.

However, those in the highest bracket, making HUD20 billion in revenue, will have to pay 40% in tax.

The new tax will have a particularly strong impact on RTL Klub, the country’s leading broadcaster.



Chris Dziadul Reports: Hungarian headache

These are deeply troubling times for Hungary’s TV industry.

As we settle down to enjoy the fantastic spectacle that is the World Cup, and prepare for our well-earned summer holidays, a serious situation is developing in the heart of Europe.

It’s been quite obvious to me for a long time that something’s not quite right in Hungary. Without wishing to make a political point, it appears the media has come under serious and sustained attack by the authorities.    

The latest manifestation of this is a new advertising tax, which we at Broadband TV News first reported on only a few days ago but have now learned has been rushed through parliament.

When it was first announced, the legislation was strongly criticised by the media industry and in particular RTL Klub, the country’s leading broadcaster. The graduated tax it proposed would have seen the Bertelesmann-backed company have to pay a whopping 40% of its advertising revenue into the government’s coffers.

Now that the law is on the statute book, that is precisely what will happen. And not surprisingly, RTL Klub is understood to have launched what can probably best be described as a vigorous assault on the government through its various media outlets.

At the same time, TV2, its closest competitor and seen as less critical of the government, has apparently been let off the hook in the new legislation by being given a significant tax break.

This situation has not gone unnoticed outside Hungary, with criticism coming from several sources. They include the European Publishers Council (EPC), which has called on the European Commission to challenge the new law, and Association of Commercial Television (ACT), which has condemned the legislation as “disproportionate and counter-productive”.

As an interesting footnote, it has just been reported that a Hungarian law firm has identified a loophole in the legislation that would effectively make service providers not established in Hungary exempt from the tax.

However, the fact remains that these are deeply worrying times in Hungary and we can only hope the situation is positively resolved as soon as possible.

Hungary passes ad tax bill

The Hungarian parliament has given the go-ahead to a controversial advertising tax that has been widely criticized by the country’s media industry and led to public protests. [Read More]

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