Official: ISPs required to pass planned internet VAT cut onto subscribers

Analysis

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Internet service providers will be required to pass on the VAT rate reduction for internet services from 27% to 18%, Tamás Deutsch, the prime ministerʼs commissioner for the Digital Welfare Program, said yesterday, according to reports.

During an interview with state-owned all news channel M1 Deutsch, who was in charge of conducting an online national consultation on internet usage in Hungary, said that under the legislation that will come into effect next year, ISPs will be legally bound to pass on the VAT reduction. Under the new legislation, ISPs will also be required to offer even cheaper base packages from next year, he added. 

According to the official, subscribers will save approximately HUF 13-15 billion as a result, however, the increase in the number of subscribers could offset the resulting drop in budget revenue, Hungarian news agency MTI reported.

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