Government could lower VAT on internet
The Hungarian government is planning on reducing the VAT rate from 27% to 18% on internet subscriptions as of next January, Hungarian economic daily Napi Gazdaság reported today. The paper added that the tax could be reduced as of 2017, if a superfast broadband network is established. The government may even contribute HUF 150 bln to the project, the paper added.
According to the paper, sectoral taxes levied on telecommunications companies in Hungary could also gradually be phased out. Hungarian news agency MTI noted that telcos in Hungary pay the utilities tax according to the size of their networks, based on calls and text messages.
At the end of October, approximately 100,000 protesters – Reuters estimates – marched on the streets of Budapest in response to the Hungarian government’s proposed levy of an extraordinary tax on internet service providers. The proposal received criticism from the European Commission and the demonstration hit international news. Finally, Hungaryʼs Economy Ministry shelved the idea.
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