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Government to give in to EC on supermarket fees

EU

Minister of Agriculture Sándor Fazekas submitted a proposal to the Hungarian Parliament to restore the supermarket oversight fee to its original level of 0.1% of net sales revenue, Hungarian news agency MTI reported late yesterday. The move would presumably allow the state to start collecting a tax that has been frozen by an EC probe.

The European Commission (EC) opened in-depth investigations into Hungaryʼs supermarket oversight fee, the EC announced on July 15, which prevented the government from collecting the fees the first installment of which was due at the end of July. Under the law, the fee currently ranges from 0.1% of net sales for stores with lower turnover up to 6% for those with higher sales, MTI reports.

The submitted proposal restores the regulation in effect before 2015, eliminating a 0% rate for stores with revenue of less than HUF 500 mln, MTI reported.

The European Commission in June said it is examining whether the oversight fee "with steeply progressive rate structures" is in line with EU legislation regulating state aid and has 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 as saying.

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