Hungary introduces media ad tax despite uproar

BUDAPEST, June 11 (Xinhua) -- Hungary's parliament on Wednesday adopted a law taxing the media's income from advertisements despite an uproar and numerous protests by television channels, radio stations, newspapers, and Internet websites.
In a vote of 144 ayes and 30 nays, the 199-member parliament passed a law setting a progressive tax on media advertising income, with a top tax of 40 percent on advertising income exceeding 20 billion forints (about 88.6 million U.S. dollars).
Critics say the tax is specifically aimed at undermining Hungary's most popular television channel, RTL Klub, owned indirectly by the German media giant Bertelsmann. The politically-neutral channel broadcasts action films and reality shows that the government allegedly would like to see less of, in favor of Hungarian national productions.
Media companies across the political palette have denounced the law, publishing newspapers with blank pages and halting television shows in mid-broadcast. More than 60 companies formally protested the move.
The new tax is valid for all electronic media service providers located in Hungary, provided that at least half of the programs aimed at Hungary are in Hungarian. It also extends to newspaper and periodical publishers, poster and billboard space providers and Internet ads.
TV2, the only other major commercial television channel, was recently bought out by unnamed parties rumored to have close government ties. An exemption to the law, allowing a deduction of 50 percent of losses over previous years is believed by many to be a lifesaver thrown directly to TV2.
The left-wing Together PM political party announced that it was submitting a complaint to the European Commission on grounds that the new law goes against European Union regulations in favoring one entity (TV2) over the others.