Internet Tax in Hungary could reap €570m in 2015

Planned Internet Tax in Hungary sees protesters take to the streets

Internet Tax for Hungarian ISPs

Internet Tax protest planned for Sunday

A bill submitted to the Hungarian parliament earlier this week will see ISPs taxes 150 forints (€0.49) for every gigabyte of data traffic over their network. Hungarian authorities have tried to pacify the general public by stating they would make sure it would come out of carrier’s coffers and not customer’s pockets.

The reaction has been outcry from both consumers and companies denouncing the Internet Tax.  A massive street protest planned for Sunday.  According to the Facebook page, at least 26,000 people are planning attend the event.

Apparently Hungary already has a tax on phone calls and text messages, but the maximum amount paid is capped. Individuals pay a maximum of 700 forints (€2.27) a month, while companies have a 5,000 forint (€16.26) limit, according to Reuters.

  • Internet traffic last year in Hungary was about 1.17 billion GB, an amount of data that would make a revenue of 175 billion forints a year (€570m) without a cap, according to consultancy firm eNet. During the same period of time, the internet service sector had revenue of 164 billion forints, the Central Statistics Office notes.
  • Hungary’s IT, Communications, and Electronics Enterprise Association (IVSZ) asked the government to cancel the plan saying that the tax would obstruct the development of the internet infrastructure throughout the country, Budapest Business Journal reports.
  • “The real losers of the internet tax are not the Internet companies but their clients, users, and all Hungarians who would now access the services they have used much more expensively, or in an extreme case, not at all,” the group said.

The United States has laws to specifically prevent this kind of situation – the Internet Tax Freedom Act (1998) and the subsequent Permanent Internet Tax Freedom Act (2013).  These acts effectively bar federal, state and local governments from taxing Internet access and from imposing discriminatory Internet-only taxes such as bit taxes, bandwidth taxes, and email taxes.

The Hungarian Internet tax bill, if passed could set a nasty precedent for other cash-strapped countries to follow.

More Here…[ZDNet]

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