Hungary | Milestones

Tens of thousands of Hungarians hold up their mobile phones as they march across the Elisabeth Bridge.

Hungary has witnessed the biggest street protests since the current right-wing government came to power in 2010, against the government’s plans to tax Internet traffic, the world’s first such levy.

The proposed levy of 150 Hungarian forints (62 cents) per gigabyte of data came on the heels of reports that the US government had barred six prominent Hungarians, including Ildikó Vida, head of the Hungarian tax authority, and other figures close to prime minister Viktor Orbán, from entering the US on the grounds of corruption. Following the protests, the largest of which filled Budapest’s streets and bridges with tens of thousands of people on October 28, the Orban government decided to shelve the current tax proposals for later reevaluation. Potential tweaks to the tax could include a cap of $2.90 per month for single payers and $20 per month for companies.

The October 28 demonstrations, which took place outside the headquarters of the ruling Fidesz party, saw demonstrators dump computer equipment in front of the building and climb onto its facade to fly the European flag and other banners. As noted Hungarian commentator and blogger Eva Balogh remarked, “the participants seemed to have had enough of the whole political system that Viktor Orbán has been systematically building since 2010.”

Government sources bracketed the Internet tax plan with already existing advertising, telecoms and bank transactions aimed at shifting the fiscal burden onto foreign multinationals, who would be somehow prevented from passing charges on to customers. However, many of the Hungarian protesters believe that the government is simply seeking to corner revenue for its supporters.

The European Commission and others also criticized the proposed Internet tax as one of a series of moves to gain a greater state share of, and greater state control over, the economy, as well as freedom of expression. It is similar to the objections raised to Internet tax plans advanced by European academics in the 1990s. (Proposals like those of Günther Oettinger, the EU’s incoming digital commissioner, for an EU-wide “Google-tax” refer more to intellectual property rights than actual Internet usage.)