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Government backs cap on proposed internet tax

Banking

The government supports a proposed amendment submitted by the governing Fidesz party to cap the tax to be levied on internet traffic at HUF 700 a month, Economy Minister Mihály Varga confirmed in Parliament yesterday.

The tax would be payable not by subscribers but by telecom service providers, Varga said, noting that the four biggest telecom service providers in Hungary had profits of HUF 75 bln in 2013. The new internet tax was proposed as part of a bill detailing next year's taxes and submitted by the government to Parliament on October 21. Under the bill, the telecom tax, introduced two years earlier, would be extended to internet services.

The bill originally called for every gigabyte of data traffic over the internet to be taxed HUF 150, payable by internet service providers. Following criticism by opposition parties, trade unions and industry organisations – as well as a hastily arranged demonstrations by tens of thousands in Budast, Pécs and Miskolc – Fidesz' parliamentary group proposed a cap on the tax. Referring to the Sunday demonstration, in which the headquarters of his governing Fidesz party were vandalized, Varga said "violence is completely unacceptable".

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