Thousands protest planned Internet tax in Hungary

World Today

Hungary Internet Tax Thousands of demonstrators hold up their cell phones as they protest against an Internet tax planned to be introduced by the Hungarian government, in front of the Ministry of National Economy in Budapest, Hungary, Sunday, Oct. 26, 2014. Inscription reads: “Mafia government”. (AP Photo/Laszlo Beliczay, MTI)

Some 100,000 angry Hungarians took to the streets of the capital Budapest on Tuesday night (October 28), to protest against a planned tax on data traffic that they fear could cripple citizens’ access to the Internet and curb basic democratic freedoms despite government pledges to downsize the tax.

The idea of the internet tax was first floated in the 2015 tax code submitted to parliament last week, and immediately sparked angry protests because users and internet service providers thought it was excessive and unjust. Prime Minister Viktor Orban’s centre-right government has clashed with the European Union and other partners since coming to power in 2010 but won a landslide victory again this year as the opposition dwindled.

His policies, including a new Constitution, a pension fund asset grab and aggressive taxation of business sectors from banks to energy and retail, provoked milder protests before, but the internet tax idea has hit a nerve.

The rally was by far the largest since Orban’s Fidesz party has ruled the central European country and protesters said they were present not only because of the internet tax but to express their dismay at the country’s situation in general.

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The crowd, which was organised by a Facebook-based group and appeared to include mostly well-heeled professionals, marched through central Budapest demanding the repeal of the planned tax and the ousting of Prime Minister Viktor Orban.

Zsolt Varady, The founder of iwiw.hu, a once-popular Hungarian social network that predated Facebook by two years, told the crowd that the tax threatened to undermine the internet freedoms that he helped popularise once.

He said the internet tax was a symbol of oppression and backwardness in Hungary.

“[Orban] is driving the country backwards and wants to make people pay for the bad governance.”

Speakers outside the Economy Ministry called on Orban to withdraw the plan to force Internet service providers to pay 700 forints (2.89 US dollars) per individual subscriber and 5,000 forints (20.63 US dollars) per business subscriber every month.

There are concerns that the tax will not be absorbed by the service providers, as the government claims.

Initially, the tax was set to be 150 forints (62 US cents) per gigabyte of Internet traffic, but the ruling Fidesz party said it would set a cap on the levy.

The government announced the proposal last week before any consultations with industry groups or even Fidesz lawmakers.

“This is something that affects everyone in one way or another, and this is really tangible for people, they feel it in their own life. It’s like the last drop in the glass,” said Ildiko Pirk, a 22-year-old who is studying to be a specialist nurse for handicapped children.

She said the internet was vital for her to get the books she needs for her studies but also to read unbiased news that is not under control by the ruling political elite.

The European Commission also took issue with the internet tax, with outgoing Commission Vice President Neelie Kroes calling for support for the protests on her Twitter account and issuing a strong statement on Tuesday.

Kroes’ spokesman said the internet tax specifically was misguided because it was based on data traffic, which is growing rapidly around the world, and it threatened to undermine Europe’s economic growth if the idea spread to other countries.

The government rejected that the tax had any motivation other than involving all sectors in taxation and extending the tax because telecommunications was shifting away from already-taxed telephony and text messages.

“Access to internet-, internet providers’ tax is known even in the U.S. and many parts of the world so I can’t really see the difference because our approach is not regarding the content or the spread of information through the internet in any way. So, though it’s probably not the best comparison, it’s a VAT type of approach to taxation,” government spokesman Zoltan Kovacs told Reuters.

He added that parliament will eventually decide on the matter.

Parliament began to discuss the law on Monday with the economy minister saying that they would support an amendment that would put a cap on the tax and would not allow service providers to put the tax burden on the subscribers.

Opposition parties do not believe that would be possible and have demanded a complete withdrawal of the law.

Hungary’s economy is on track to expand by 3 percent this year after years of recession and stop-go growth, while inflation is near zero as the government forced through a series of big utility price cuts.

But the recovery has not resulted in steady job creation and hundreds of thousands of people have left the country of 10 million in search of better opportunities.

Many protesters saw the internet tax as a tipping-point issue that may evolve beyond its immediate significance.

Report compiled with information from Reuters and The Associated Press.