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Varga: Tobacco, ad tax justified

Banking

Economy Minister Mihály Varga defended the proposed amendement to the advertisement tax and the progressive tax aimed at tobacco manufacturers yesterday in an interview with commercial channel ATV.

Commenting on the revision which targets advertisement revenues in the higher tax bracket, the Economy Minister said he did not see anything wrong with the hike, "given that if someone dominates the market and makes a profit on the vast majority of the revenues generated there, then we have decided correctly in this matter". Varga suggested that the tax would contribute to the state budget to support important social, health-care and educational goals.

On the proposed one-off progressive tax on tobacco manufacturers, Varga said that since 2010 the government is determined to cut back on smoking as it is a seriously health risk and carries with it major social spending costs. Furhtermore, the EU requires that the amount of the tax be close to the European average from year to year. If the change to the tobacco tax affects bigger players to a larger extent, then "I can accept that," he added.

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