Most consumer goods retailers have so far paid 1% tax and this will now rise to 5.3% while the ceiling under which zero percent tax was paid has been lowered to 100 million forints (EUR 328,000), which is a big tax rise, the statement said.

Tax payable by small and medium sized companies (SME) could rise by as much as ten-fold, it said.

Another problem is that self-advertisements such as leaflets or banners put up in the shop are now planned be taxed, too. This is the form of advertisement used by most SMEs, OKSZ added.

The OKSZ calls for scrapping tax on self-advertisements and would also keep the 500 million forint threshold for the zero percent tax, it said.

The government announced last week that it wants to apply a flat 5.3% rate for the advertising tax on a tax base over 100 million forints.

Currently the tax is 0% up to a tax base of 500 million forints, 1% up to 5 billion forints, 10% up to 10 billion, 20% up to 15 billion, 30% up to 20 billion and 50% for a tax base above that.

The tax is based on annual net revenue. Revenue from the ad tax is targeted at 6.6 billion forints in this year’s budget.

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