Hungarian media protest against planned new tax on advertising

Fri Jun 6, 2014 10:32am EDT

* Newspapers publish blank pages, TV screens go blank in protest

* Fidesz has clashed with EU, foreign investors over past laws

BUDAPEST, June 6 (Reuters) - Hungary's two main daily newspapers ran a blank page each on Friday after television stations briefly went off air in protest against a new law by the ruling Fidesz party to tax advertising revenue, a measure many media companies said could ruin them.

Hungarian Prime Minister Viktor Orban's party has clashed repeatedly with the European Union and foreign investors over his policies, which have included big windfall taxes on banks, energy and telecoms firms to keep the budget deficit in check.

Critics have accused Fidesz of curbing media freedom and democratic checks and balances, allegations it denies.

The Hungarian unit of RTL Group, which is majority-owned by German media conglomerate Bertelsmann , said the tax would push it into losses. The Hungarian Advertising Association urged legislators to vote against the proposed tax.

"Content is not free. Advertising serves as a main income for the media industry. The proposed advertising tax will ruin the majority of media companies," the association said.

Hungary's main commercial television and radio station, several other private channels and media online sites went off air for 15 minutes late on Thursday night in protest against the tax that would be imposed on their revenues this year if the law is passed by parliament.

Antal Rogan, head of Fidesz' parliamentary group, told national news agency MTI on Thursday that sectors which have made significant profits such as advertising should help ease the country's tax burden.

Orban's Fidesz party won 133 of 199 seats in parliament during elections held in April, repeating its 2010 landslide, and just enough to pass sweeping reforms on its own without support from opposition parties.

In his initial four-year term, Orban imposed hefty special taxes on banks, energy, telecoms and retail firms in his bid to lower the budget deficit. Orban had pledged more of the same policies if re-elected.

The tax would increase progressively up to a rate of 40 percent of annual revenues exceeding 20 billion forints ($89.57 million), according to the proposed legislation that was published on parliament's website.

It was not clear when parliament would vote on the new law.

($1 = 223.30 Hungarian Forints) (Reporting by Krisztina Than; Editing by James Macharia and Ralph Boulton)

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