Hungary has decided to suspend a controversial plan to tax internet data transfers, after the proposed policy sparked large protests earlier this week. As Reuters reports, Prime Minister Viktor Orban announced told Hungarian media today that the so-called internet tax will be withdrawn from the country's draft budget, and that a tax on money earned online will be revisited next year.
"This must be withdrawn, and we do not have to deal with this now."
"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 Radio Kossuth Friday. "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 This must be withdrawn, and we do not have to deal with this now."
The proposed tax would have seen internet service providers pay around $0.62 per gigabyte of transferred data. Officials estimated that the policy would bring in about $8 million in additional revenue, though others pegged the total as high as $720 million. Around 100,000 demonstrators took to the streets of Budapest on Tuesday to protest the plan as well as the broader policies of Orban's central-right government, which many see as increasingly authoritarian.
Speaking to Hungarian radio, Orban said the government will discuss internet regulation and taxation again in January, with talks concluding by the middle of next year.
"There are two questions," Orban said. "The question of internet regulation, what can and cannot be done, and the financial questions of the internet. We really should see somehow where the huge profits generated online go, and whether there is a way to keep some of it in Hungary and channel it into the budget."
Neelie Kroes, vice president of the European Commission, welcomed Hungary's decision to move away from its internet tax, describing it as a victory for Europe. "I'm very pleased for the Hungarian people," Kroes said in a statement Friday. "Their voices were heard. I'm proud the European Commission played a positive role in defending European values and a digital Europe."