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EC launches probes of two Hungarian measures

EU

The European Commission (EC) opened two in-depth investigations into Hungaryʼs supermarket oversight fee and healthcare contributions payable by tobacco companies, the EC announced today, according to Hungarian news agency MTI.

The European Commission reportedly said it is further examining whether the two recently introduced measures "with steeply progressive rate structures" are in line with EU legislation regulating state aid and have prohibited Hungary from applying the progressive rates until it concludes the assessment.

"At this stage, the Commission has concerns in both cases that the progressivity of the rates based on turnover provides companies with a low turnover, a selective advantage over their competitors, in breach of EU state aid rules," the commission reportedly said.

"While a fee based on turnover does not in itself raise state aid issues, the Commission considers at this stage that the progressivity of the fee rates selectively favors companies with a low turnover and gives them an unfair competitive advantage over others," the EC was cited saying.

The EC reportedly noted that new rules governing the fee came into force at the start of 2015 and the first payments are due at the end of July.

The supermarket oversight fee ranges from 0.1% of turnover for stores with lower revenue up to 6% for those with higher sales, MTI said, adding that the rate for healthcare contributions by tobacco companies range from 0.2% to 4.5% of turnover, also depending on the scale of revenue.

"The Commission welcomes Member State measures to reduce tobacco consumption. However, it has doubts that the effects of tobacco products on public health increase progressively with the turnover of companies selling them," the EUʼs executive body said.

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