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Hungary To Tax Internet Traffic
An anonymous reader writes: The Hungarian government has announced a new tax on internet traffic: 150 HUF ($0.62 USD) per gigabyte. In Hungary, a monthly internet subscription costs around 4,000-10,000 HUF ($17-$41), so it could really put a constraint on different service providers, especially for streaming media. This kind of tax could set back the country's technological development by some 20 years — to the pre-internet age. As a side note, the Hungarian government's budget is running at a serious deficit. The internet tax is officially expected to bring in about 20 billion HUF in income, though a quick look at the BIX (Budapest Internet Exchange) and a bit of math suggests a better estimate of the income would probably be an order of magnitude higher.
"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." -- Ronald Reagan
Hungary is, sadly, turning into authoritarian regime focused on maintaining the power of those at the top. Anything that feeds their spending habits is on the table, I'm sure. We should expect more news like that coming from Hungary :(
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Hungarian dude here.
1. That will be delegated to the ISPs. The plan is, that the ISPs should pay these taxes from their profits, and are expected NOT to increase the internet subscription fees, however, they will anyhow.
2. It is a tax on everything. not just streaming.
3. They won't leave anything untaxed.
Isn't the Internet already taxed? Not sure about Hungary, but most places you're taxed for the computer you buy, and for Internet service you get from a provider. The provider is likely taxed for the copper/fiber, taxed for the employees they have, the equipment they purchase. Electricity, real estate, etc related to this endeavor. That's all taxed. Sounds like a desperate government out of ideas.
... looks like an attempt to restrict free speech from a little closer to Hungary. The current regime has serious totaliarian tendencies and this tax (which will raise internet connection prices) leaves less avenues of communication for the Hungarian citizens.
Note the prices for an internet connection; at 30 gbytes/month, this tax could double the entry level price. At the average salary in Hungary, the extra $18 will be felt.
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This summary is a bit hysterical, in the excessively panicked sense. TFA indicates there is a cap on taxes for both individuals and service providers, and this DRAFT bill is likely to contain the same sort of provisions. Of course, whether such a tax is a good idea is up for debate, but statements like "could set back the country's technological development by some 20 years" are ridiculous. Excise taxes already exist on other goods and services without complete disaster.
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You're talking over half a buck ($0.62) per gigabyte.
Think about this in terms of AT&T's DSL service. Where you're capped at 150GB (and it's ridiculously easy to exceed).
That's an additional $93 over and above the cost of the connection itself! The ISPs are currently selling connections for $20-40 a pop.
How, EXACTLY, are ISPs supposed to simply absorb these costs?
The correct answer is "they aren't".
So the additional costs are going to get kicked onto the end-user's bill.
Now imagine your $20 a month internet services suddenly becoming a $110 a month internet service.
This is a way to encourage people to NEVER use their internet service.
It's the sort of thing that can cripple the entire industry in that country.
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My question is why a $0.62 USD tax on 1GB when a $1/month of 1mb/s can transfer 300GB? $186 of tax on $1 of service. That's a 18600% tax.
That's the most shocking thing, to me, about this proposal. It's a HUGE potential cost. It would make 'modern' web pages, with their kilobytes (or megabytes) of never-executed, embedded javascript, massive stylesheets, fancy images, and ads-ads-ads, extremely expensive. I would expect every Hungarian to immediately cancel any streaming service and to turn off "Auto load images" and "precache links." I would expect that Hungarian web sites would return to 1990's style terse HTML. That could be a good way to drastically reduce bandwith use in any country that implemented it and dramatically increase the pressure on ISPs to upgrade their networks.
Of course, applying it to the ISPs, rather than to the users, means that none of the bandwidth-conservation pressure will be applied to the people actually capable of affecting consumption, so it's likely to have no effect whatsoever. Except, maybe, to force all of the ISPs into bankruptcy
Easy, government will forbid increasing fees.
Looks like "The power to tax is the power to destroy" is going to be demonstrated once again.
If Hungary the want's to jump back into the stone age, so be it. P.S. This is just Draft legislation.. If the proposal is made into law, I see Google, Yahoo, and every major ISP abandoning that country in short order. Same goes for any web hosting providers. Backbone providers will route their traffic around that tiny country. I expect the transition to be relatively dramatic.
One can only hope the voters recall their conservative stone age representatives and put in socialists in charge, with an eye to the future. I can also see the EU court stepping in an declaring this tax to be invalid/moot as a violation of human rights.