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Brussels still believes in chance for out-of-court agreement on telecom tax, spokesman says

Banking

The European Commission continues to believe that the difference of opinion between the EU and Hungary regarding the government's telecom-sector tax could be settled without the involvement of the European Court, European Commission Spokesman Jonathan Todd told MTI's Brussels correspondent after the National Economy Ministry on Wednesday confirmed the government's stance on the matter.

The ministry said Hungary does not intend to modify the telecom tax act and is prepared to defend its position in court.

Member states settle 95% of their disputes before they go to the European Court, Todd noted.

The Commission opened an infringement proceeding against Hungary concerning the tax in March 2011, asked the government to abolish it on September 29, saying the tax was illegal under EU telecoms rules with revenue used for the central budget and not spent on regulating the sector.

The tax -- between 0% and 6.5% of gross revenue, excluding VAT -- was introduced in 2010 as one of three "crisis taxes" also levied on the retail and energy sectors for a temporary three years.

The government targets revenue of HUF 161bn from the crisis taxes this year, including about HUF 61bn from the telecoms sector.

 

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