Budapest---Hungary is set to slash a steep advertising tax, which had hurt Luxembourg-based broadcaster RTL, whose Hungarian news channel is often critical of the government.
A reduction of the tax -- whose top rate is 50 percent -- will be proposed Wednesday at a meeting of the ruling coalition parties, Janos Lazar, the minister in charge of Prime Minister Viktor Orban's office, told state news agency MTI Tuesday.
Lazar said the current progressive levy would be replaced by a flat tax, and hinted the single rate could be fixed at 5.0 percent.
"The highest advertising tax in any EU member state is in Austria -- 5.0 percent," he told MTI.
The only company liable to pay the current top rate is RTL, which is majority-owned by German entertainment giant Bertelsmann.
Last October, RTL filed an official complaint with the European Commission, arguing the tax was discriminatory and damaging to press freedom.
Lazar said the Commission had sent Budapest a letter last month expressing concern that the tax gave an economic advantage to smaller groups.
Orban's right-wing government introduced the tax last June, as one of several levies targeting sectors dominated by foreign firms.
After the introduction of the tax, RTL expanded its news coverage, particularly on corruption, boosting viewer numbers.
"RTL will continue its independent news coverage in any case," the group's spokesman Oliver Fahlbusch told AFP Tuesday.
"We would welcome such an amendment of the advertising tax law, in particular if our legal concerns would be addressed without further interventions from the EU," Fahlbusch wrote in an email.
"This would be a positive and important signal for all international investors in Hungary," he added.
The announcement of the planned tax reform comes a day after German Chancellor Angela Merkel, who was visiting Budapest for the first time since Orban took power in 2010, expressed concerns over press freedom in Hungary.
AFP
