RTL has given a strong indication that it may pull out of Hungary, where it operates the country’s leading broadcaster RTL Klub.
Portfolio reports that both it and TV2, its closest rival, have issued statements criticising a proposed new tax that will reduce 20% of their net annual advertising revenues above HUF10 billion (€34.5 million).
Net annual advertising revenues of between HUF1 -5 billion and HUF5-10 billion would meanwhile incur levies of 1% and 10% respectively.
The proposed tax, which is due to be voted on this Wednesday (May 29), is aimed at advertising media and would hit RTL Klub harder than any other company in Hungary.
Indeed, it has been estimated that the broadcaster’s tax obligation would be HUF4.3 billion, equivalent to 15% of its total annual revenues.
TV2 would be the second most affected company, being required to pay HUF1.7 billion, or 11% of its revenues.
Interestingly, it is believed revenues from the new tax, though hugely damaging to RTL Klub and TV2, would be relatively negligible in the state’s overall budget.
RTL Klub and TV2 were launched within weeks of each other in late 1997 and have since been the dominant players in Hungary’s commercial TV marketplace.
