Hungarian Politics

[Neil]

Seems reasonable, when you consider that a big goal for Fidesz would be to limit Hungarian exposure to foreign ideas.  Limiting communication technology would also be useful in that it would interfere with opposition organization.

On the surface, taxing internet usage, while abominable, isn't really all that bad.  But when you consider the other actions of Fidesz and what they stand for, you do have to wonder about their motives.

[Syt]

On that:

http://online.wsj.com/article/BT-CO-20141021-713675.html#

Hungary Plans to Tax Internet Use with Levy on Service Providers

BUDAPEST--Hungary plans to tax internet use, beginning next year, by levying a special tax on internet service providers to raise budget revenues.

The measure would be the latest in a series of extraordinary taxes the Fidesz-party government has introduced since coming into power in 2010.

The move will be an extension of Hungary's already existing telecom-sector tax since "most of the phone calls and text messages are done these days via the internet versus the traditional telephone lines," Economy Minister Mihaly Varga said at a news conference on Tuesday.

At present, Hungary has an extraordinary tax levied on each minute of a phone call and every text message  , with a monthly cap on the tax's amount per customer.

The new tax will be 150 Hungarian forints ($0.62) on every started gigabyte of data, reads the draft 2015 tax bill, which the economy ministry submitted to parliament on Tuesday, before submitting the draft 2015 budget bill to parliament by Oct. 31.

Hungary's biggest internet service providers include its three mobile operators: Norway's Telenor ASA (TEL.OS), U.K.'s Vodafone Group PLC (VOD), and Telekom, an arm of Magyar Telekom Nyrt. (MTELEKOM.BU), majority-owned by Germany's Deutsche Telekom AG (DTE.XE), as well as UPC, owned by U.S. cable group Liberty Global (LBTYA).

Also beginning next year, telecommunications companies may deduct their corporate tax from the special telecom-sector and internet-data-traffic tax, the draft bill adds.

Parliamentary approval of the new levy is likely since Fidesz has a two-third majority in parliament after it won a consecutive second term in power in general elections in April.

To express disapproval of the government's plan, several Facebook pages started Tuesday night to organize street demonstrations for Sunday. Various Facebook users have said the new levy would limit access to the internet and thus hamper the freedom of expression.

The budget revenue the government expects to collect from the new levy could exceed 20 billion forints a year, Peter Beno Banai, a state secretary at the economy ministry, told Hungarian online news agency Mfor on Tuesday.

Based on Hungary's international internet traffic data, which only covers part of the country's data traffic, fellow Hungarian news portal Index has estimated that the budget revenue could total as much as 95 billion forints a year.

In comparison, Hungarian internet providers' combined revenue totaled 164.4 billion forints in 2013, according to figures from the Hungarian statistics office.

0.62$ per started GB of data. Shadow of Mordor is over 30GB to download on Steam. So that'll be an extra $18.- in internet tax that'll be levied from the provider (and, let's face it, passed on to the customer); not to mention every time you uninstall/reinstall the game.

[Tamas]

Many think this tax in the bill is intentionally too high now, so they could "hear the people" and halve it or something. That would still be extraordinary high and a massive hit to the sector. This current level would just kill it altogether unless the ISPs imposed traffic limits.

[Martinus]

Wow, Hungary is such a shithole it is not even funny.

[Martinus]

Anyways, you guys are missing trees for the forest - the tax may be an expensive inconvenience for individual customers but it will kill international businesses (or telecoms, if they do not manage to pass on the tax) which transfer terrabytes of data daily. I can't imagine banks, insurance companies, lawfirms etc. to be able to function. Makes you wonder if Fidesz is so stupid or so malicious.

[Martinus]

It seems a pretty hefty tax to me.

Yeah, there are a lot of GB cycling through the internet, even in Hungary. Seems like a whole lot of free money for the government. It'll be interesting to see to what degree it might hit "regular government supporting" Hungarians.

The article posted by Syt provides the data. It seems the new tax would amount to app. half of the current revenues of all Hungarian telecoms. That's revenues, not profits, mind you. This is not a "hefty" tax. This is a tyrannical tax.

[Tamas]

In other news, looks like despite the clear message of "cease and desist" from the US, we are (well, Hungary is, I am not there anymore) on full ahead course toward Russia.

Orban met with a Gazprom chief a month ago. Since then:
-we have stopped gas shipments to Ukraine
-we have created a new law letting Gazprom store gas in our state-owned gas storages as if that gas was still on foreign soil eg. no taxes on it until it is sold to a Hungarian company, but actually Gazprom can sell it to other countries from there as well. So they got free storage to work around a potential meltdown with Ukraine.
-this law is about to be extended with a paragraph removing all need for international consultation and cooperation when building gas pipes within Hungary. The only possible reason for this to allow the ASAP building of Russia's South Stream pipe system on Hungarian soil, without the meddling of the pesky EU.

[Syt]

-this law is about to be extended with a paragraph removing all need for international consultation and cooperation when building gas pipes within Hungary

Considering that most major pipelines are international projects, I'm not even sure if this is practical, unless all other nations say, "screw this" and start to literally work around Hungary.

[Tamas]

-this law is about to be extended with a paragraph removing all need for international consultation and cooperation when building gas pipes within Hungary

Considering that most major pipelines are international projects, I'm not even sure if this is practical, unless all other nations say, "screw this" and start to literally work around Hungary.

Well no. If those countries have the same EU-approved regulations and laws on this they will still need to consult with Hungary. This is about Hungary showing the EU the finger about closely cooperating with its biggest current rival on a decisive strategic project.

[Tamas]

Regarding all this Russia stuff, there is only one thing I am unsure about: Is Orban doing this because the Russian secret service has something on him, or because the country is much more out of money than they would have you know and he needs Russian assistance in the near future.

[Tamas]

And now one of Orban's "lieutenants" sent in the proposal to limit this tax to 700Ft (cca 2.3 euros) per person per month.

On a sidenote it doesn't make sense since they are taxing the gross data transit of the ISPs with the declared aim of "we cannot have the people paying for it", but anyways.

Main point is: this is how you introduce a horrible new tax, kids. If they just announce this 700Ft stuff straight away, there would have been the same uproar as for the first version. But now everyone will go calm, because instead of outright destroying public access to the Internet, they are just making it about 50% more expensive.

[Tamas]

Its not getting any attention next to the Internet tax but other than also raising taxes on different consumer items (soaps shampoos and such), also they are introducing a big tax on the profit of the investment funds.

Ever since they have drastically decreased the base interest rate (the central bank is ruled by Orban's crony now) savings have started flowing into two places: bonds, and investment funds. The latter is clearly not to the government's liking because they are introducing such a tax that will force the funds to raise their profit margin ergo decreasing the benefits of customers pushing them toward the bond market.

[Tamas]

In other news of today's Surreal Hungary edition: the Hungarian state TV has signed strategic partnership with the Chinese state TV.

[Tamas]

There was a big demonstration yesterday against the Internet Tax, which ended with a bunch of people doing some damage to the Fidesz HQ building.
There is another demo scheduled for tomorrow. It will be crucial to have at least the same number of people.

The "civil organisation" in support of Fidesz has announced they'll probably do another "Peace March" (when on party and tax money they get together a hundred thousand supporters plus assorted imported Polacks to demonstrate their love for the dear leader). In his longwinded explanation, he mentioned stuff like "America is not our friend, neither our ally" and that the US is using "internal traitors" to steer up trouble.
It was a delightfully 1950s thing to read. No surprise though, the guy writing it was a devoted fan of communism until he found the radical nationalist in him cca. 10 years ago.

And where did our new Foreign Minister went during our biggest diplomatic crisis with our allies since, well, probably 1956? To China. To speak on a conference about the "challenges facing the European Union".

Seriously, I think Hungary is a major security risk in both NATO and EU by now. This regime needs to be toppled by the US because the Hungarians themselves will not do it.

[Tamas]

Also now government officials are talking about the South Stream gas pipe construction starting in 6 months. You know the pipe that is opposed by the US, considered against EU rules by the EU, but being built by the Hungarian government just the same.

It is of strategic importance of course, since right now we are only receiving big amounts of gas from Russia. With South Stream, we would have a new route to receive big amounts of natural gas from... Russia.

So it fits nicely with the government strategy of diversifying our energy dependencies. Part of that strategy is having the Russians build us a second nuclear power plant, financed from a loan given by the Russian state, which is btw the biggest in the country's long history of being up to our neck in debt.