Hungarian Prime Minister Viktor Orban

Angered by government plans to impose the world’s first tax on web traffic, thousands of Hungarians have taken to the streets of Budapest in protest.

RT News reports that “tens of thousands” of people besieged the Hungarian Economy Ministry building to protest the tax on Sunday. They’re aiming to force the government to scrap a proposed law that would tax Internet service providers (ISPs) up to 150 forints ($0.62) for every gigabyte of data traffic transferred over their networks.

If passed, the law would go into effect next year, and though it stipulates only ISPs will have to pay the tax, netizens fear the tariff will be passed onto them in the form of increased fees.

“Not a clever idea”

Prime Minister Viktor Orban’s government justifies the move by saying it will generate some $8 million a year in tax revenue, although that figure has been disputed. Other estimates claim it could rake in as much as $720 million if no caps on the tax are imposed. Hungary could use the cash. The country is in debt to the tune of more than $110 billion, according to the National Debt Clocks website.

The legislation has come in for heavy criticism from several sectors. A Facebook page set up to organize Sunday’s protest says 41,000 people ‘went’ to voice their frustrations, using the Facebook term for attendance. Telecommunications firms are also angered at the proposal. The country’s biggest telco, Magyar Telekom Nyrt. says it’s opposed to the bill, because it affects service providers, individuals, companies and the public sector, according to The Wall Street Journal. Meanwhile Hungary’s main opposition party has said the plan would send the country back into the 1990s, while others have said the move will reduce the freedom of media and bloggers, and hamper the country’s economic development.

The EU’s Digital Agenda Commissioner Neelie Kroes has also weighed in on the matter. “Unilateral internet taxes are not a clever idea,” he said. “It will increase internet access prices for consumers. Hungary is already below the EU average on virtually every digital indicator. This isn’t going to help. Shame on them!”

Hungary has set a precedent of sorts for its Internet tax. It already imposes taxation on phone calls and SMS messages, but this is capped at $2.88 for individuals and $20.63 for companies. It’s not known if the Internet tax would also be capped.

So far Hungary’s government has refused to back down to the protestors demands, and the organizers of Sunday’s rally are promising an even bigger protest next Tuesday.

photo credit: Duda Arraes via photopin cc