Clothing retailers to be strangled by new “tie” tax

The Hungarian Ministry of Culture proposes to extend the 0.8% cultural tax on carpets, outerwear, suits, costumes, ties, bowties and cravats, reports Napi Gazdaság. According to the Ministry’s state secretary Márta Schneider, these products hold a cultural value due to their design.

László Harsány, chairman of the Nemzeti Kulturális Alap (National Cultural Fund), expects that the “tie tax”, as it is commonly called, would increase the income of the fund by Ft 700-800 million (€2.8-3.2 million). Their income is currently around Ft 8 billion which they gain from different taxes. The fund uses the money to support cultural projects.

The cultural tax was first imposed onto pornographic products, with the idea being to support culture with the money gained from culture-destroying products. The tax has since been imposed onto more and more products.

In related news, three motions to remove the “internet tax” from the list of services required to pay into the cultural fund were voted down, thus leaving open the possibility of a tax on internet services, an MTI report at index.hu stated.