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New telecom sector tax could lead to postponement of developments, experts says

The planned new tax to be imposed on the telecom sector would reduce the pace of technological development and international experience shows the European Union does not support a special tax imposed on the sector, consultancy firm IFUA Horvath and Partners said following the announcements made by Prime Minister Viktor Orbán on Wednesday.

It is a general trend that EU member states tend to reduce the level of similar taxes – if they can – in order to help economic growth. The European regulation does not favour special taxes imposed on the telecom sector. Brussels maintains the position that only costs related to regulations can be charged to service providers and has therefore recently instructed France and Spain to cancel the special tax imposed earlier, the statement notes.

The company told MTI that a total of HUF 180 billion - HUF 200 billion in investments are made in the telecommunications sector in Hungary each year. The company noted that the 80-100 companies active in Hungary's telecommunications sector generate HUF 1,300 billion in revenue per year. The three largest companies – Magyar Telekom, Telenor and Vodafone – account for approximately HUF 1,000 billion of this revenue. (MTI-Econews)