New ad tax could hurt retailers

Deals

Retail chains could be required to pay approximately HUF 2 on each catalog, in which they advertise their own products and sales, under the recently submitted tax bill that is calling for an amendment to the advertising tax, Hungarian online daily nol.hu reported Friday.

According to estimates made by the daily, this could equate to HUF billions for retail chains, which will likely lead to increased prices on the shelves. Retailers will be required to pay the advertising tax not only on their catalogs, but also on in-store banners.

Retailers most likely to be affected by the proposal are Aldi, Lidl and Penny Market, chains which regularly issue catalogs of their own products. Tesco, Auchan and Spar also distribute their own product catalogs, however less frequently than the aforementioned three. Retailers least likely to be affected are Hungarian chains such as CBA, Coop and Real.

Doing business in Hungary has become increasingly difficult of late for retail chains subsequent to the introduction of the Sunday closure law on March 15, which restricts retailers from opening on Sundays. The daily average consumer spending, however, was reported to have grown from HUF 20.9 bln to HUF 22.45 bln since mid-March despite the new legislation requiring shops of more than 200 sqm to shut their doors on Sundays.

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