EC finds oversight fee rates, health-care contribution discriminatory

Budapest, July 4 (MTI) – The European Commission has found that progressive rates for a supermarket oversight fee and health-care contributions by tobacco companies introduced by Hungarian lawmakers were discriminatory and violated European Union rules on state aid.

“The Commission concluded that the progressive tax rates grant a selective advantage to companies with low turnover over their competitors,” the EC said on Monday.

The EC launched its probe almost a year earlier and prohibited the application of the progressive rates until the investigation was completed.

The supermarket oversight fee ranged from 0.1 percent of turnover for stores with lower revenue up to 6 percent for those with higher sales. Late last year, parliament voted to abolish the progressive rates and reinstate the flat rate of 0.1 percent, a step the EC acknowledged addressed its concerns over state aid.

The rate for the health-care contribution by tobacco companies range from 0.2 percent to 4.5 percent of turnover, also depending on the scale of revenue, even though “Hungary has provided no evidence that the effect of tobacco products on public health increase proportionally with the turnover of the companies selling them or that the last pack of cigarettes sold by a producer would have less health-related effects than the first one sold by the same producer,” the EC said.