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Per-minute telephone tax unpredictable revenue source, telcos say

The per-minute telephone tax would not provide a predictable revenue source for the central budget, while it would substantially change people's phone habits, as a result of which it would not provide the expected tax revenue and would also reduce VAT revenue from phone services, Magyar Telekom, Telenor Magyarország and Vodafone Magyarország said in a joint statement on Monday.

The telecom companies, nevertheless, confirmed that they wish to continue talks with the government regarding the telecom tax. MTI has learnt that no agreement was reached at the latest meeting on Friday. The companies said that if the current draft were put into practice, that would impose a substantial burden on their customers and cause a disproportionate, unpredictable increase in telecom costs for Hungarian companies, jeopardizing their competitiveness.
The companies emphasized that they considered the multiple taxation of an industry as important to the national economy as the telecommunications sector to be dangerous, but also expressed their understanding for the government's points of view and said they would help it with proposals so that the consumption-based tax envisaged in the Széll Kálmán Plan 2.0 is introduced in a timely and sustainable manner.
It was earlier reported that, according to the plans of National Economy Minister György Matolcsy, the first ten minutes' worth of phone calls would be exempt from the tax, and the telecom tax would be capped at HUF 700 per month per capita. Companies would be paying a maximum HUF 2,500 per month. Experts pointed out that this could favor the well-off as those spending HUF 20,000-40,000 per month on phone calls would be paying HUF 700 just as those spending far less on phone costs.
The new version would require costly IT developments from service providers. A decision will have be taken soon as the government plans to collect tens of billions of forints in tax revenue already this year. The government projects additional revenue of HUF 30 billion this year and HUF 52 billion in 2013 from the telecom tax. Based on this, around HUF 300 would be collected per user. There are around 11.5 million mobile phone subscriptions and 2.9 million landline connections in Hungary.