The Hungarian government has withdrawn its plans to impose a tax on consumption data on the Internet, which had generated massive public protests over the past two weeks.
The announcement of the cancellation was made by Prime Minister Viktor Orbán.
“This tax in its present form can not be applied,” he said. The government wanted to impose a tax on telecommunications, but people interpreted it as a tax on the Internet”, Orbán added on public radio.
“People discussed the rationality of this. In these circumstances we cannot apply it,” said the prime minister, who stressed that the government has taken note of the unease generated by the proposal and has acted accordingly.
The government last week announced a new tax rate, which would have provided about 60 million forints per year, by imposing a levy of 50 cents per gigabyte consumed, with a monthly maximum of 2.2 euros for individuals and 16 euros a week for companies.
On paper, the new fee may seem reasonable, but what is behind an internet tax is not necessarily the tax or the extra cash generation for the government, any government.
The Hungarian government would have not only set a precedent by imposing the tax, which would been undoubtedly used by other European nations to impose a tax themselves, but also would have set a precedent for establishing a limit on the amount of data a user could access.
All in all, it was not a problem of economics, but of access.
As things stand right now, technology companies like Google and Facebook already manage to block content or deny access to certain content on bogus copyright grounds, for example, so Hungary’s plan to tax and limit access to a certain amount of data would have been something like codifying limitations in the government’s realm.
The proposal caused a storm of protests, which resulted in two mass rallies attended by tens of thousands of Hungarians.
The initiative also sparked a wave of criticism from both the political opposition and the telecommunications companies and leading figures from the world of culture.
Orbán said that “people not only do not you enjoyed this measure but consider it irrational,” although, he naively said that the new tax was only applicable to telecommunications, which would have only taxed internet providers..
This is not the first time Budapest intends to get its hand into telecommunications or simply communication in general. Back in 2012, the government introduced a tax on telephone communications.
The new rate was of about 2 forints, the equivalent of 0.0065 euros per minute for mobile calls and every text message sent. In 2013, the government increased the tax to 3 forints.
After the massive protests and after deciding to back pedal in his attempt to tax data consumption on the internet, the Prime Minister informed Hungarians that he intends to carry out a nationwide consultation in 2015 about the internet by mailing citizens a questionnaire to know their opinions on this matter.
“We must have an answer to the question of where do the huge profits generated on the internet go”, he said and “if you could keep provide Hungary a part of those benefits,” said added.
Civil society organizations have taken to the streets to protest over the past two weeks and they have welcomed the withdrawal of the tax plans while calling for a new demonstration to “celebrate the victory.”
Luis R. Miranda is the Founder and Editor of The Real Agenda. His 16 years of experience in Journalism include television, radio, print and Internet news. Luis obtained his Journalism degree from Universidad Latina de Costa Rica, where he graduated in Mass Media Communication in 1998. He also holds a Bachelor’s Degree in Broadcasting from Montclair State University in New Jersey. Among his most distinguished interviews are: Costa Rican President Jose Maria Figueres and James Hansen from NASA Space Goddard Institute. Read more about Luis.