Hungary’s government looks at taxing internet downloads

23 Oct 2014

Budapest, Hungary

In a move that would send shivers down the spines of internet users anywhere, the government of Hungary is considering a proposal to apply a tax of US$0.62 for every gigabyte of data downloaded.

The Hungarian government is dealing with a national budget deficit and in a surprise move, is looking at taxing ISPs to shore up its budget.

It is envisaged that the stealth tax of 150 forints per gigabyte could bring in anything between US$80m and US$720m, according to Reuters.

The move could generate more revenue than the Central European country’s entire internet industry currently generates.

The imposition of the tax would be in keeping with similar moves by Prime Minister Viktor Orbán’s government in recent years in terms of imposing special taxes on the banking, retail and energy sectors, as well as telecoms providers.

The taxes should be considered a retrograde step, insofar as they have only served to jeopardise profits in some sectors of the economy and will no doubt frighten away international investors.

According to consultancy firm eNet, fixed-line internet traffic in Hungary reached 1.15bn gigabytes in 2013 and mobile internet traffic generated 18m gigabytes of downloads. In total, this would generate 175bn forints a year under the new tax.

Let’s hope the new tax doesn’t give other nations’ governments ideas. For example, in Ireland, the new water tax has turned out to be a bit of a damp squib.

Budapest image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years