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Hungary plans per-gigabyte “internet tax” on service providers

Hungarian internet service providers will be forced to pay a new “internet tax” on the data use they enable, if the country’s parliament passes a new tax bill.

Reports suggest that this bill will go through, as the ruling Fidesz party has a two-thirds parliamentary majority. It would levy a tax of 150 forints, or around 62 U.S. cents, on every gigabyte of data used by ISPs’ customers – an internet-focused extension of an existing tax on phone calls and text messages.

As many fear the ISPs will pass the costs on to their customers, Hungarian internet users are predictably apoplectic, and some have reportedly planned demonstrations for this coming weekend. Fidesz has responded by saying there will be a cap on the tax, perhaps “around one thousand forints,” presumably per month. Economy Minister Mihály Varga has also suggested that competition would stop the ISPs raising their prices.

Telecoms companies would also be able to offset their corporate income tax against the new internet tax and existing telecom tax. Despite all this capping and offsetting, the Hungarian economy ministry said it expects to derive $83 million a year from the tax.

The Hungarian opposition has urged the government to drop its plans, warning that increasing the cost of web usage would take the country back to the 1990s.

Meanwhile, Hungarian web entrepreneur Zsolt Várady, who founded a once-popular but now defunct social network called iWiW, has reportedly sued all the Hungarian political parties that have been in government since 1990, for creating a tax system that allegedly violates his constitutional rights to fair economic competition, enterprise, free economic competition and fair working conditions.

Várady contends that the system is so “impossible” that viable businesses have to resort to tax fraud or evasion, giving the increasingly authoritarian government opportunities for “blackmail and manipulation” of businesses when they need it.

4 Responses to “Hungary plans per-gigabyte “internet tax” on service providers”

  1. Just received an email that came from Zagreb (85.114.38.234) that says my American Express account has been disabled due to someone attempting to login – link that I’m supposed to click to reinstate the account is in Beijing (211.68.127.32 – China Education and Research Network Center). OFF WITH THEIR HEADS!

    No amount of TAX will stop these criminals.

  2. Expat-in-HUN

    I have seen some news articles mention that there is 700 Forint (roughly $3) cap per non-corporate customer, so this would only meant slightly higher monthly rates and NOT data caps.

    • Gergely Varju

      The 700 Forint cap is currently only a rumor to say the least.

      The proposal is about extending telecommunication TAX to internet use. The law states that telecommunication TAX for phone calls and text massages is limited to 700 forints / phone number for private users and 5000 for business users / phone number. But doesn’t mention net traffic.

      So claiming there is a limit in proposal is a lie.

      It doesn’t end here. Members of the ruling party proposed to have a separate but similar cap. And the government said they might consider that. Or making some really low traffic users exempt from the tax. To refine it slightly. So there can be a cap on it but it is not planned by the government…