Hungarian Internet Tax Plan Sparks Protest

The Hungarian government has proposed a metered tax on using the Internet. It’s led to “thousands” of protesters taking part in dramatic demonstrations that appear to be having some effect.

The tax would technically be applied to internet service providers rather than consumers. The ISPs would be charged 150 forints (a little over 60 US cents) for every gigabyte they transfer. The government has explained the tax as a way of bringing internet communication into line with phone calls and text messaging, the costs of which already attract taxes.

In its draft state, the new tax law would allow ISPs to offset their corporate income tax to reduce the amount they owe from the internet use tax. However, an ISP industry association has already said it will raise prices if the tax comes into force. Protesters believe the costs may even be passed on directly, effectively making Internet use a metered payment service.

Large crowds gathered last night outside Hungary’s Economy Ministry, with protest methods including raising aloft lit cellphones in unison and throwing parts of old computers at the ministry’s door. Groups organizing the protests online have argued that the tax could have anti-democratic effects by making it more expensive to exercise free speech and exchange political ideas.

Today Hungary’s ruling party Fidesz says it plans to amend the bill to cap the tax related to each individual user to 700 forints ($2.87) a month, and to bar ISPs from passing this cost on to customers.

The Wall Street Journal quotes one protester who believes the entire affair is a smokescreen to distract attention from a scandal in which the American government has banned six Hungarian officials from entering the US over alleged corruption.