Hungarians Protest Against Planned Internet Tax

Thousands of demonstrators light up their mobile phones as they protest against an internet tax planned to be introduced by the Hungarian government in front of the Ministry of National Economy in Budapest, Hungary, 26 October 2014. Photo EPA/BGNES

Thousands protested in Budapest on Sunday against Hingarian government’s plans to impose tax on Internet data traffic.

Opponents to the new levy say it will not only make it more expensive for individuals and businesses to use Internet, especially for cash-strapped schools and universities, but will also restrict access to the Web to government critics who mainly use online media.

The Hungarian government led by Prime Minister Viktor Orban included the new levyin the 2015 draft tax bill submitted to parliament. Under the proposed draft, Internet providers will  have to pay a tax of 150 forints (EUR 0.50) per gigabyte of data traffic traffic transferred over their networks.

Even though the draft suggests companies will be able to offset corporate income tax against the new levy, the protesters believe common users will have to bear the increased tax burden.

Orban has said the new levy will be an extension of phone call and text taxes his government introduced in 2011. Neelie Kroes, the outgoing European Commissioner in charge of the EU’s digital agenda, said last week the new tax will hurt Hungary's digital economy, pointing out that the country has a below EU-average score its Internet use, broadband access and online regulation.

According to state-run Hungarian news agency MTI, protests against the planned new tax were also held in the towns of Pecs, Miskolc and Veszprem.

The organizers of the protest action in Budapest said in a statement the proposed new tax “is part of the Orban government’s increasingly repressive efforts to control and punish independent media and civil society watchdog groups through both legal and economic means.”

Orban’s government plans to collect as much as 25 billion forints (EUR 81M) of revenue from the measure. According to the Economy Ministry, the new levy is needed because people increasingly use Internet-based services instead of traditional phones.

While the demonstration was underway, Orban’s governing Fidesz party issued a statement in which it promised to submit on Monday an amendment to the draft legislation in parliament, which would cap monthly payments for household subscribers at 700 forints (EUR 2.3).

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