Government proposes lowering top ad tax rate to 5.3%

Deals

The Hungarian government is expected to propose reducing the top rate for the progressive advertising tax to 5.3%, from the current 50%, Cabinet Chief János Lázár said at a weekly press conference today. The change was planned after the European Commission began investigating the existing advertisement tax.

German RTL Group company had filed a complaint to Brussels as its Hungarian subsidiary RTL Klub was the only media outlet that fell into the highest bracket. The German group had said that the tax was meant as a way to pressure the station into better government news coverage – and that it put its Hungarian business in a "structurally loss-making position".

According to earlier reports, Lázár negotiated with RTL management about lowering the ad tax, allegedly in exchange for better news coverage of the government, but the firm has denied this report.

Lázár noted that the tax is expected to generate a revenue of HUF 7-8 bln this year.

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