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Marketing alliances blast govʼt proposal to increase ad paper tax

According to a proposal submitted on September 24, the environmental protection tax on one kilogram of paper used for ads is set to increase to HUF 304 from the current HUF 85 rate, an amount that is unacceptable to both the Hungarian Advertising  Association (MRSZ) and Direct and Interactive Marketing Alliance (DIMSZ), according to a joint press release sent to the Budapest Business Journal.

Both bodies offered their cooperation to the government in order to find a satisfactory solution for everybody involved, while also asking for clarification on why the increase is so large. The press release claims that the main losers will be consumers, especially low income ones.

"The significant decrease or disappearance of informative releases will therefore result in a disadvantaged situation for a number of consumer groups, leading to lack of information, in turn preventing conscious consumer behavior and leading to an obvious increase in prices," the press release argues. The two organizations also say that people involved in making free advertisement papers may even lose their job as a result.

The extra burden imposed by the tax on the direct marketing branch could be as high as HUF 17.5 billion, according to industry calculations. 

The most vulnerable people to the proposed changes would be members of the layer that rarely uses digital means of information, the organizations insist. However, according to a survey by DIMSZ, 80% of the youth also believe that these ad materials aimed at informing consumers and facilitating shopping decisions are helpful. About 75% of those who receive and also welcome ad material use them to get informed about food discounts at retail stores.