Economy
RTL chief attacks Hungary for advertising tax
"One should not forget we are the last major independent television company" in Hungary, CEO Dirk Gerkens of RTL Hungary told international media representatives in Budapest. The executive sees the newly adopted Advertisement Tax in Hungary as a government move with the aim of either buying the channel at a bargain price, or force it out of the market.
Dirk Gerkens has headed the local RTL operation since the 1997 market entry of the company, the Financial Times reminded. The CEO has emphasised that RTL has no intention to sell the Hungarian unit and will make every effort to protect its interests. While declining to unveil the group's legal strategy, he said the case was keeping three legal consultancies busy at the moment.
The new Advertisement Tax Act is openly directed against RTL as the sole company with revenues falling in the 40% tax bracket, the CEO argued. "40% tax on revenue, rather than on profit, is unprecedented on a global level," he claimed, adding that RTL Hungary generated approximately HUF 4 billion profit last year, less than the HUF 4.5 billion per year it stands to lose in advertising tax.
The Financial Times has also asked the government about advertisement tax. A press office response has stated that the new tax is not discriminative, does not affect the operations of newspapers and television channels, and does not constitute a breach of the principle of free speech. It is a government objective to attain a fair distribution of tax burdens, with each economic actor making a contribution proportionate with the profit they are making. The government has accused RTL of using the advertising tax issue to avoid tax obligations and cover up its politically biased reporting. It causes confusion that RTL is hiding its controversial business interests behind the principle of free speech and employs news editing and reporting practices with a self-serving political agenda, according to the government.
The more critical and in-depth reporting style employed by the channel recently have met with viewer approval, something that justifies the reporter's approach, Gerkens responded to the government concerns. "The last thing I would discontinue is news reporting," the CEO said.
Dirk Gerkens has headed the local RTL operation since the 1997 market entry of the company, the Financial Times reminded. The CEO has emphasised that RTL has no intention to sell the Hungarian unit and will make every effort to protect its interests. While declining to unveil the group's legal strategy, he said the case was keeping three legal consultancies busy at the moment.
The new Advertisement Tax Act is openly directed against RTL as the sole company with revenues falling in the 40% tax bracket, the CEO argued. "40% tax on revenue, rather than on profit, is unprecedented on a global level," he claimed, adding that RTL Hungary generated approximately HUF 4 billion profit last year, less than the HUF 4.5 billion per year it stands to lose in advertising tax.
The Financial Times has also asked the government about advertisement tax. A press office response has stated that the new tax is not discriminative, does not affect the operations of newspapers and television channels, and does not constitute a breach of the principle of free speech. It is a government objective to attain a fair distribution of tax burdens, with each economic actor making a contribution proportionate with the profit they are making. The government has accused RTL of using the advertising tax issue to avoid tax obligations and cover up its politically biased reporting. It causes confusion that RTL is hiding its controversial business interests behind the principle of free speech and employs news editing and reporting practices with a self-serving political agenda, according to the government.
The more critical and in-depth reporting style employed by the channel recently have met with viewer approval, something that justifies the reporter's approach, Gerkens responded to the government concerns. "The last thing I would discontinue is news reporting," the CEO said.
