Parliament adjusts advertisement tax rate

A left-wing columnist interprets the new advertisement tax rules as discriminatory. He accuses the government of intending to silence media outlets critical of the current regime.

On Tuesday, Parliament approved the amendments to the advertisement tax law tabled by the government in order to comply with criticism from the European Commission of the current rules. According to the new law, media outlets will have to pay 7.5 per cent tax after their advertisement incomes exceed 100 million Forints. The previous tax rate was 5.3 per cent, but the government retroactively cancelled the tax for the first five months of 2017, and the new rate will be used from June onwards only. Thus, media outlets will pay 20 per cent less in ad tax this year, but will need to pay more from next year on, because of the tax hike.

In Népszava, Miklós Hargitai contends that the new tax law is intended to silence voices critical of the government. In the left-wing columnist’s interpretation, the tax rate hike will impact primarily those media outlets who rely on the advertisement market. In contrast, the pro-government dailies and TV channels which run advertisements by state owned companies and the government will not be affected by the introduction of the higher tax rate, he believes. Hargitai fears that higher advertisement tax rates will weaken media plurality in Hungary and will increase the government’s leverage on public discourse.

Tags: advertising, media, tax