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Hungarian Lawmakers Adopt New Telecoms Tax

by Ulrika Lomas, Tax-News.com, Brussels

21 May 2012


Provoking outrage among telecommunications companies, the Hungarian parliament has recently backed government plans to impose a new telecommunications tax of HUF2 per minute of connect time and per message from August 1.

Expected to generate annual revenues for the conservative government of Hungarian Prime Minister Viktor Orban of around HUF44bn (USD189m), the tax will be imposed after the first ten minutes of connect time and capped at a monthly limit of HUF700 for individuals and HUF2,500 for businesses in Hungary.

In a communiqué, the three large telecoms companies located in Hungary underscored their shock at plans to modify the tax, noting that during initial negotiations the government had originally proposed imposing a tax on telephone users. Denouncing the plans, the companies insist that the bill presented to parliament represents a tax on the providers of telecommunications services.

The tax was agreed within the framework of the government’s new ‘Szell Kalman’ plan, forming part of the country’s euro convergence programme and containing new tax measures to help shore up its revenue base.

Telecoms companies are already subject to a specific “crisis” tax of HUF61bn. Introduced in 2010, the tax is due to be reduced by half in 2013, before finally being abolished in 2014.

Hungarian lawmakers are also expected to adopt shortly the government’s plans to introduce a financial transactions tax in Hungary from 2013, levied at a rate of 0.1% on bank and post office transactions.

TAGS: tax | business | Hungary | law | telecoms

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