By Margit Feher
BUDAPEST--Hungary should revoke its plan to tax Internet traffic
from Jan. 1 as the proposed levy would reduce the country's
competitiveness, head of the U.K. mobile company Vodafone Group
PLC's (VOD) Hungarian arm said on Thursday.
"A responsible government should be able to make the decision to
revoke its mistaken plan since it would inflict a globally unique
tax on a field that is key for the country and its economic
development," Vodafone Hungary's chief executive Diego Massidda
said in an emailed statement to The Wall Street Journal.
Hungary plans to introduce a 150-forint ($0.62) per Gigabyte tax
from next year on Internet traffic, with limits on the tax per
subscriber. The government amended the plan to have caps on the tax
after tens of thousands of people took to the streets to protest
over the weekend and on Tuesday night in Budapest and other
towns.
The tax plan "was a major surprise and a big disappointment for
us at the same time since it was submitted [to parliament] without
any prior coordination, (or) industry consultation," Mr. Massidda
said.
Under the government's revised plan, individual subscribers will
have to pay a monthly levy of not more than HUF700 while business
subscribers will have to pay up to HUF5,000 for each subscription
they hold.
"Making the Internet accessible to an even wider circle is in
fact part of the government's strategic plans," he added.
Vodafone agreed at the end of September to pay HUF30.2 billion
to Hungary for various unused mobile broadband frequencies.
Including the license fees paid by other mobile firms as a result
of the tender, Hungary raised a total of HUF130.6 billion from
selling the unused spectrum.
Vodafone also said it "wishes neither to confirm or deny" a
recent report in Hungarian daily Nepszabadsag that it is
considering not signing the frequency purchase contract.
The government should revoke its latest tax plan since "its
introduction would be detrimental to Internet users, the service
providers and the country's competitiveness," Mr. Massidda
said.
Hungary already has a 27% value-added tax in place on Internet
services. In addition to that, telecom companies will also have to
pay a special tax on every text message and minute of land-line and
mobile phone call, with a monthly cap per subscriber.
The new levy will be installed to make up for lost budget
revenue since subscribers have in recent years substituted
traditional phone calls and text messages with cheaper alternatives
over the Internet, the government has said.
Write to Margit Feher at margit.feher@wsj.com; Twitter:
@margitfeher