Hungary suspends internet tax plans after international protests

Vociferous criticism at home and abroad leads to climbdown by Hungarian government

Hungary has shelved plans to tax internet usage following an outcry from opposition parities, internet users and the wider world in general.

While it would have expected some resistance to its revenue raising-plans, the government of prime minister Viktor Orban was no doubt shocked that its plans made headlines around the world, few if any of them favourable. Stung by these criticisms, the Hungarian government has announced that the plans have now been suspended, pending a national consultation beginning in January.

The original plans, announced on 22nd October, were an extension of the country's existing telecommunications tax and would have seen a 150 forint tax - £0.39 - levied on each gigabyte of data used by Hungarian citizens. Those citizens reacted angrily and almost immediately, launching a Facebook campaign and marching 100,000 strong in the capital Budapest to protest against the draft plans.

Criticism also came from the EU, with Ryan Heath, spokesperson for digital agenda commissioner Neelie Kroes, accusing Hungary of creeping authoritarianism: "It's ... part of that pattern of actions which have limited freedom or sought to take rents without achieving a wider economic or social interest," he said.

Meanwhile, the German economics minister Rainer Bruederle announced his backing for 13 large European companies that had asked Brussels to intervene; the new taxes would have hit foreign companies operating in Hungary disproportionately.

"Charges which primarily affect foreign companies are fundamentally a problem for the European internal market," Bruederle said.

Following the initial protests in Budapest, Orban's government announced a partial climbdown, capping the proposed tax at £1.80 per month for individuals and £12.50 for Hungarian businesses. However, the protests continued and the signs are that the plans have now been kicked into the long grass.

"This tax in its current form cannot be introduced because the government wanted to extend a telecommunications tax, but the people see an internet tax," Orban told Reuters.

"If the people not only dislike something but also consider it unreasonable then it should not be done ... The tax code should be modified. This must be withdrawn, and we do not have to deal with this now."