Hungary's 'internet tax' sparks protests

BRUSSELS - Up to 10,000 people rallied in Budapest on Sunday (26 October) in protest of Viktor Orban i’s government plan to roll out the world’s first ‘internet tax’.

Unveiled last week, the plan extends the scope of the telecom tax onto Internet services and imposes a 150 forint tax (€0.50) per every gigabyte of data transferred.

European Commission spokesperson Ryan Heath said, under the tax hike, streaming a movie would cost an extra €15. Streaming an entire TV series would cost around €254.

The levy, to be paid by internet service providers, is aimed at helping the indebted state fill its coffers.

Hungary’s economy minister Mihaly Varga said the tax was needed because people were shifting away from phones towards the Internet.

But unhappy demonstrators on Sunday threw LCD monitors and PC cases through the windows of Fidesz headquarters, Orban’s ruling party.

A Facebook page opposing the new tax attracted thousands of followers within hours of being set up after the regime was announced. The page called for a protest with some 40,000 people having signed up by Sunday early evening.

Hungary’s leading telecoms group Magyar Telekom told Reuters the planned tax “threatens to undermine Hungarian broadband developments and a state-of-the-art digital economy and society built on it”.

The proposal has generated controversy in Brussels as well.

EU’s outgoing digital chief Neelie Kroes i on Sunday told people to go out and demonstrate.

“I urge you to join or support people outraged at #Hungary Internet tax plan who will protest 18h today,” she wrote in a tweet.

The backlash prompted Orban’s government to rollback the plans and instead place a monthly cap of 700 forints (€2.3) for private users and 5,000 forints (€16) for businesses.

The concession did little to appease critics who say the levy will still make it more difficult for small businesses and impoverished people to gain Internet access. Others say it would restrict opposition to the ruling elite.

“This is a backward idea, when most countries are making it easier for people to access the Internet,” a demonstrator told the AFP.

"If the tax is not scrapped within 48 hours, we will be back again," one of the organisers of the protest told the crowds.

Orban, who was elected for a second term in April, has come under a barrage of international criticism for other tax policies said to restrict media freedoms amid recent allegations of high-level corruption.

Civil rights group say the Fidesz-led government fully controls the public-service media and has transformed it into a government mouthpiece.

An advertising tax imposed in August risks undermining German-owned RTL, one of the few independent media organisations in Hungary, which does not promote a pro-Fidesz editorial line.

Kroes has described the advertising tax as unfair and one that is intended “to wipe out democratic safeguards” and to rid Fidesz of “a perceived challenge to its power.”