Hungary puts internet tax plans on ice following heavy protests

The Hungarian prime minister Viktor Orban has suspended plans to introduce a new tax on internet usage, which would have seen ISPs pay around 62 U.S. cents for every gigabyte of data their customers used.

The plan was revealed about 10 days ago as part of Hungary’s draft budget, with the new tax – an extension of an existing tax that applies to phone use — designed to help shore up the country’s ailing finances. It immediately attracted condemnation from opposition parties, who warned it would take the Hungarian internet back to the 1990s.

Hungarians, organizing via Facebook, staged a protest last Sunday, after which the government promised to cap the tax at $2.90 a month for individual internet users and $20 for businesses. A second, larger protest followed on Tuesday, with tens of thousands of Hungarians marching in Budapest, mobile phones held aloft.

The European Commission weighed in earlier this week too, with Ryan Heath, spokesman for outgoing digital agenda commissioner Neelie Kroes, hinting that the move was part of Hungary’s drift towards authoritarianism. “It’s part of a pattern and has to be seen as part of that pattern of actions which have limited freedom or sought to take rents without achieving a wider economic or social interest,” Heath said.

On Friday, claiming that “the debate has been twisted,” Orban relented, saying on public radio that the draft tax bill would need to be amended. The prime minister promised a national consultation on the internet, saying it would begin in mid-January and probably take “a long time.”

“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 said, as quoted by Reuters. “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 This must be withdrawn, and we do not have to deal with this now.”

Kroes welcomed the decision, saying in a statement: “I’m very pleased for the Hungarian people. Their voices were heard. I’m proud the European Commission played a positive role in defending European values and a digital Europe.”

This article was updated at 3.45am PT to include Kroes’s quote.