Hungary Suspends Proposed Internet Tax

Hungary Suspends Proposed Internet TaxHungary Suspends Proposed Internet Tax

A planned tax on using the internet that sparked public outrage and mass demonstrations in Hungary is to be suspended and the matter reconsidered next year, the country’s Prime Minister Viktor Orban said Friday.

“The Internet tax cannot be introduced in its current form,” Orban said in a radio interview.

The draft legislation would have seen internet service providers forced to pay 150 forints (0.49 euros) per gigabyte of internet traffic, later proposed to be capped at different monthly rates for individual and business users, France 24 reported.

It prompted tens of thousands of angry demonstrators to take to the streets twice in three days earlier this week, with protesters throwing outdated computer parts at the headquarters of Orban’s ruling Fidesz party.

Orban said Friday the tax will not be introduced because “people have questioned the rationality” of the measure, but added the government will hold a national consultation from mid-January about regulating and taxing the internet.

“Nothing can be introduced in these circumstances. This debate is derailed,” Orban said, adding that the government sees the tax as a technical issue.

The government, which announced the proposal last week before any consultations with industry groups or even Fidesz lawmakers, gave several explanations for the measure – it was meant to complement a tax on telephone calls, as people were increasingly using the Internet to make calls; it would take a bite out of the telecommunications companies’ allegedly large profits; and the new revenues would help improve Internet access in rural areas.

But critics saw it as another attempt by the right-wing prime minister to silence dissent in the country by making internet access more expensive – with internet providers likely to pass on the cost of the tax to consumers.

The protests were also a sign of growing discontent among mostly younger citizens against Prime Minister Orban’s policies, seen as centralizing power and increasing the role of the state to the detriment of private enterprise.

Fidesz won its second consecutive two-thirds majority in April and Orban is starting his third four-year term.