Hungary's Parliament Partially Backtracks on Internet Tax

Thousands gathered to protest against the government's plans on Sunday in Hungary's capital Budapest. Photo by EPA/BGNES

The Hungarian legislature is expected to have its say on the idea of Prime Minister Viktor Orbán to charge the use of Internet which sparked thousands-strong protests in the capital Budapest.

The opposition has warned a decision to levy the Internet could "weaken" Hungary by affecting the entire economy, hindering technological growth and putting thousands of jobs in jeopardy.

"We are not here because of the tax. We are fed up with this government. We are tired of corruption and theft," the Bulgarian National Radio quoted a protester as saying.

Under plans unveiled by the Budapest government, a tax of HUF 150 (EUR 0,50) per GB is to be imposed, but the cabinet later promised to add a cap on what would be paid by households. It added the legislation, if approved, would only affect providers to a greater extent.

A "new edition" of the draft proposal envisages a monthly limit of EUR 2.26/GB for households and EUR 16.17 for companies, adding Internet suppliers would have to pay the sum for their customers.

Critics however suggest access to the network will also become more expensive for households as providers will have to raise bills to make up for additional costs.  

Representatives of the technological industry described the new tax proposal as "unreasonable, absurd and controversial... and will force Hungary into making a U-turn on its road to development of digital technologies," a prospect of which the outgoing EU Commission also raised concerns.

Businesses demand that the proposal be completely reversed.

The government is expected to deliver its final position later on Tuesday.

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