The advertising industry can be reversed by the Advertising Association according to the Hungarian Advertising Association

The advertisement is not just a source of income for an economic sector, but also one of the promoters of the overall growth of the Hungarian economy, and the 3.75% advertising tax announced by Magyar Péter as part of next year's budget will likely curb advertising expenditures, which in turn will reverse the projected 2.4 percent GDP growth, warns the Hungarian Advertising Association in its statement. According to the cost estimate prepared by PwC Hungary on behalf of the MRSZ, every 1 Forint spent on advertising contributes approximately 6 Forints to the performance of the Hungarian economy, as advertising stimulates consumption, strengthens market competition, supports innovation, and directly and indirectly creates jobs and tax revenues, they state. For this reason, the taxation of the advertising industry is not solely the problem of directly affected businesses. The increase in advertising costs or the reduction of advertising investments can also affect other sectors of the economy, reduce consumption and the stimulation of corporate growth, and consequently adversely affect GDP according to the MRSZ statement. In his address to the National Assembly on Monday, Magyar Péter spoke about increases in living costs, the doubling of family support, and some tax increases. The MRSZ also draws attention to the fact that the increase in tax from 0 to 3.75% does not mean that the sector has not been taxed until now: like all other Hungarian businesses, companies pay corporate tax, local business tax, general sales tax, social contributions related to employment, and other taxes according to general tax rules. The advertising tax is an additional, revenue-impacting special tax, which can result in a payment obligation even if it does not depend on the profitability of Hungarian businesses, or even in cases of unprofitable operations. The MRSZ believes that the reintroduction of the advertising tax directly and particularly negatively affects the operation of domestic content providers and the business sustainability of the advertising tax on the performance of domestic advertising revenues. Furthermore, the association does not see how the special tax will apply to the advertising costs of domestic advertising that account for nearly 40% of taxes paid to global technology companies, which are usually not Hungarian taxpayers, that provide their services from other EU member states. Another tax burden would further reduce the competitiveness of the domestic media market compared to global players, regardless of whether the latter pay advertising taxes, according to the MRSZ. Editor: HVG / Reviczky Zsolt