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Planned ad tax raise could shut down some media outlets

The Hungarian Advertising Association (MRSZ) has protested against recently announced government plans that would raise the advertisement tax to almost double the current amount, according to reports. The association claims the planned measure would force the closure of some media companies in Hungary.

MRSZ notes that, excluding the online segment, Hungaryʼs advertising market itself expanded less than 9% in 2016. Online news daily index.hu quoted the MRSZ as saying that the Hungarian government “has declared a war on the media industry”. 

The association believes that the proposed raise would undermine the growth potential of the Hungarian media sector and would threaten the livelihood of many Hungarian firms, while put global players into an advantageous position.

Citing the opinion of related associations, index.hu reports that the tax raise would lead to price rises that could be diverted back to advertisers and eventually to consumers. Therefore, those media outlets that operate without government advertisements could see particular hardship, index.hu adds.

While MRSZ has urged the government to open a dialog on the matter, other related associations have called for the scrapping of the higher tax altogether, according to index.hu.