EC: Internet tax 'bad direction'

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Hungary is behind the EU average concerning digital penetration and levying a tax on internet use would point to "a bad direction" and would further hold back online data traffic, the spokesman of outgoing EC commissioner for digital agenda Neelie Kroes said yesterday.

Talking to journalists in Brussels, Ryan Heath said that it was the digital economy which could help Europe out of the crisis. "So taxing that in a country that is already below the EU average is a particularly bad idea", he said.

Heath said that the proposed tax was part of what many see as a troubling pattern in Hungary, and "that is why the tax had to be tackled and debated now, not just after the law had been adopted". When asked about Sunday's demonstration he said that the overwhelming majority of the protesters were peaceful, and that "Kroes will continue to support ongoing protests against that planned tax".

Last week, Kroes in a twitter message labelled Hungary's planned tax "a disgrace" and later called for protest against the proposal. After a big demonstartion on Sunday, another demonstration is planned against the tax in Budapest and some other cities for Tuesday afternoon.

Yesterday, the Hungarian Cable telecommunication Association (MKSZ) said that the internet tax was unacceptable even if capped or in any other form, and asked the government to withdraw it. The tax is based on a false concept, and it would set back network developments and will run against the further rise of internet speed and the drop of subscription prices, MKSZ said.

The association was refering to an amendment tabled on Monday which would cap the tax at HUF 700 a month for reatail subscribers and at HUF 5,000 a month for non-retail subscribers. The government proposed to levy a HUF 150 tax on every gigabyte of data traffic over the internet, payable by internet service providers, in next year's tax package, tabled to parliament a week earlier.

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