A draft tax bill was submitted to the Hungarian parliament on 21 October containing measures to tax internet service providers (ISPs) HUF150 (USD0.6) per gigabyte (GB) of data traffic from 2015, with companies allowed to offset corporate income tax against this levy. Hungarian economy minister, Mihaly Varga, is cited as claiming that communications technology has changed the way telecoms services are used, therefore requiring a tax code change, according to Reuters. The ministry allegedly predicts an annual revenue of HUF20 billion from the new tax, with the Central Statistics Office (KSH) detailing the country’s annual revenue from the internet sector to be HUF164 billion at end-2013.
Magyar Telecom (M-Tel), the country’s largest internet provider, has purportedly already paid between HUF25 billion and HUF35 billion in taxes over the last few years and can expect to pay around HUF10 billion if the proposed tax fails to be capped. The operator has called the proposal ‘drastic’ and says it will prevent further internet expansion by existing providers as well as deterring interest from new market players.