IOEKTA | Creative Unity

Hungary backtracked on Internet tax after massive protests

Hungarian government froze plans to impose a tax on Internet traffic, backing down in the face of massive street protests and warnings from the European Union that the levy was a mistake.

Hungarian Prime Minister Viktor Orban said that the Internet tax plan was not being withdrawn altogether. He told public radio the government would start consultations next year over internet regulation and potential ways to tax some of the revenue generated online.

The tax plan, that hasn’t been consulted with industry players about, was not likely to have made a significant contribution to bringing down Hungary’s budget deficit, which is anyway shrinking. Under the planned tax, Internet service providers would have paid 150 forints (around 50 Euro cents) per gigabyte of data traffic, though it would have also let companies offset corporate income tax against the new levy. The tax would be capped at 700 forints for individuals and 5,000 for companies per month.