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UPDATE: On October 31st Viktor Orban announced he was cancelling the plan to introduce an internet tax in its current form. Mr Orban said he would launch a "national consultation" on internet regulation in January, to look for ways to tax some of the "huge profits generated online".
VIKTOR ORBAN has finally hit a speed bump. The popular Hungarian prime minister had been on an unstoppable roll this year, winning a two-thirds majority in parliament and waving off foreign criticism of his increasingly illiberal policies. But this week Mr Orban and his governing Fidesz party suddenly faced an unaccustomed sight: tens of thousands of protestors in the streets of Budapest (pictured). The demonstrators were riled by a planned tax on internet usage, which the startled government promptly announced it would cap. For the first time in a long while, there appear to be limits to what Mr Orban can do.
The government announced its plan to levy the world's first internet tax on October 22nd. It would charge users 150 forints (62 cents) per gigabyte of data—a substantial sum for a family with several smartphones and laptops, in a country where the average monthly wage is $950. The Facebook page "100,000 against the internet tax" quickly garnered more than a quarter of a million likes, and by Sunday demonstrators were in the streets. The protest on Sunday, and the even larger one on Tuesday, were mostly peaceful, although a small contingent of demonstrators attacked Fidesz’s headquarters, throwing old computers at the building. Substantial protests also took place in many provincial cities.
After Sunday’s protest Fidesz announced that the tax would be capped at $2.90 per month for individuals and $20 per month for companies. It would be paid by telecoms companies, who would be strictly forbidden from passing it on to their customers. (How to prevent companies from passing on costs to customers is a riddle that may leave economists scratching their heads.) But the move is unlikely to mollify the protestors. Even right-wing journalists, such as those at the conservative blog Mandiner.hu, have criticised the proposed tax. Fidesz MPs, too, say the announcement caught them by surprise.
The furious reaction against the tax owes much to the belief of internet users everywhere that they are entitled to free data. But protestors say it is also connected to dissatisfaction with the government’s increasing authoritarianism in other areas. There is particular concern at recent police raids on non-governmental organisations and civic groups funded by Norway. Those measures led American president Barack Obama, in a speech in September, to bracket Hungary with countries such as Egypt and Azerbaijan for its restrictions on civil society.
The Fidesz government also faces more concrete problems with the Americans. Earlier this month Washington issued entry bans for six prominent Hungarians it accuses of corruption, either high-level government officials or people connected to the government. (Their names have not been officially released.) American officials said the bans were a warning to Hungary to halt its slide into authoritarian illiberalism, which Washington's chargé d'affaires in Budapest, André Goodfriend, called "this downward trend in its own society". The Hungarian government asked America to provide evidence for the allegations so that it can take action itself. In the meantime, government spokesman Zoltan Kovacs got into an angry Twitter exchange with Mr Goodfriend after he was spotted attending the protests on Sunday; the American said he had simply gone down to the demonstration to get his fair share of the views.
The European Commission, too, has condemned the proposed tax as a brake on civil liberties. A spokesperson called it “part of a pattern…of actions which have limited freedoms or sought to take rents without achieving a wider social or economic interest.” Hungarian officials deny any such attempt to restrict freedom. Mr Kovacs said the proposed tax is an extension of an existing telecommunications tax, part of the government’s strategy of “burden-sharing”. Hungary has introduced a series of such so-called "sectoral taxes" in recent years, including taxes on banks and advertising. Those taxes, too, have often drawn fire from Brussels.
Not all reaction has been critical. Leonid Bershidsky argues in Bloomberg View that there is no logical reason why data should be exempt from taxes: “If governments choose to tax consumption in general—and most of them do, through value-added or sales taxes—it’s logical to tax data consumption, too.” The final wording of the law will probably be decided in December, and Mr Kovacs told the Economist that suggestions from businesses and civil society will be fully considered. But for most observers, Mr Orban's internet tax fits into a pattern of using taxes and regulations as levers to control independent economic and social activity, part of what Mr Orban this summer called a move to turn Hungary into an "illiberal state". And while previous protests against Fidesz have faded away after a few weeks, the internet levy may just be a tax too far.
Reporting and analysis on the economics, politics, security and culture of the eastern half of the European continent
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It is very hard to detect the truth in the Hungarian situation at the moment. One truth is that Orban has not cancelled the proposed tax - first he renamed it as an extension of the 'telecommunications tax' then he said it would not go ahead in its present form and would be reviewed next year. I don't think anyone, neither supporters nor opponents, have much doubt that the PM's intention is to introduce the tax next year, as planned, but with a few cosmetic changes so that it again confuses and divides the opposition. That in itself is a curious phenomenon, let alone the propensity of Fidesz to pile taxes on taxes - not only is the internet already subject to VAT (which I is not controversial), but for people who want to pay for this, they also pay an additional tax for the privilege of using money to make the payment (the tax on financial transactions). On top of these would come the 'internet' tax. Who actually wants the internet tax and thinks its a good idea apart from Orban and his followers who are too scared of him to disagree? Nobody who uses the internet, nobody who works in the digital economy, not researchers or internet developers, not foreign investors, not the EU and so on. Doesn't it make you curious that this 'unorthodox' tax is so outstandingly unpopular? So who is recommending it? What are the benefits? Exactly how does it support the Hungarian economy? Which economists have done the analysis and projections? None of this has been explained in a reasoned and transparent manner, as could be expected in a normal democracy. The approach of Fidesz and its supporters seems to be to bully people rather than reason with them.
Hungary's prime minister is defending the powers of his democratically delegated government against the interests of the unelected but heavily financed non-governmental organisations. The ultimate question in this context is how to define democracy:
1) as it is objectively defined as per the UNIVERSAL DECLARATION ON DEMOCRACY by the Inter-Parliamentary Council,
2) or as per the ad hoc subjective definitions of the richest lobbies in a country or in the world.
It would render a country's election meaningless circus if decision-powers can just freely shifted from the elected to the unelected.
It is NOT authoritarianism to protect a system that genuinely protects the majority's interest based on the objective terms of democracy, against civic unelected but heavily financed powers who through bribery and plotting against a government attempt to revert it into the rule of the richest minority.
The very fact that the current Government of Hungary responded to the demonstrator's demands also shows that Orban is one of the last pillars of true democracy.
All over the world current so called "democratic" Governments are increasing the burden of the people via Spending cuts and increasing taxes and utility-prices while offering tax-cuts for the rich, and selling out their countries to the global lobbies via the odious public debt scheme. Whenever there are demonstrations against the rising prices and taxes the response of these governments is NEVER yielding to the demonstrator's demands; on the contrary. Governments keep ignoring the people's will and keep suppressing these demonstrations by brutal police violence meanwhile maintaining or even worsening the austerity measures.
And "interestingly" enough these anti-austerity mass-demonstrations are not covered by the mass-media, and the actual anti-democratic and authoritarian governments are NEVER criticised.
It beggars belief that ⅔ of a country would vote for a chickenshet who is simply obsessed with control and order and lobotomising every part of society and person therein.
This must support a theory that if people in a society have had their freedom taken away for 50 years...they are not able to deal with being free when they have the chance.....and need to revert to the childlike state of being told waht to do by an authoritarian paternalistic figure.
Pity the Hungarian people.....and others who are used to authoritarianism from Russians to Myanmar. How will they ever be free if they do not have the skills to handle freedom.
Wow, a post full of factualities and logical reasoning. I am impressed.
Fidesz and Orbán do not have the backing of two-thirds of the country.
Most reports on Hungary repeatedly fail to make it clear that the reason Orbán came to power again is by default, because only about half the electorate in Hungary bothered to vote at all.
So the "Putin-light" dictatorship here is not a reflection of support for a megalomaniac, but a direct result of the apathy of many Hungarians,with their confused values, who were simply too irresponsible to vote.
This country does not understand the value of a democratic system, whatever the imperfections within it, but hopefullly the proposed internet tax has removed the scales from their eyes, at last.
The only way to end the downward spiral into complete state control is more and more and larger and larger protests. More power to their elbows.
The present regime will fall, as all such dictatorships do, and the sooner the better, if Hungary wants to remain in the EU. Though for my part, I cannot understnd why it has not been chucked out already?
Everyone here knows how EU moneys are used:
One third for the projects for which they are intended.
One third to line the pockets of Orbán and his family and followers.
One third for Fidezs lawyers, who are so good at covering up the scam.
Where are your auditors, EU?
In most democracies, the rich become politicians, in Hungary,you become a politician in order to get rich, and Fidesz have been brilliantly successful at this.
The only way to end the downward spiral into complete state control is more and more and larger and larger protests. More power to their elbows.
All this in the name of democracy, huh?
Yes dear, in democracies, when people find themselves subjugated, they protest. In Hungary, where things are often back to fornt, and which is not democratic under Orbán, the government protests against the people whenever it feels criticised or when things don't go to plan, such as the last time Orbán lost an election, and he simply could not accept it so he rallied his supporters and staged violent protests against the people and against their vote!
Those who slanderously attack Hungary's current government as a "dictatorship" may want to look up the actual definition of what a democratic system or a dictatorship actually covers.
Your post contains false statements as for the current Fidesz-Government. This Government is a democratic one as per the objective definition of the term. The very fact that Fidesz retracted this proposal provides sheer evidence - a democratic response to the people's demand, which is unprecedented in the current corporation and bank-governed Western "liberal" system.
Your claims - accusations - however fully applicable to the former Hungarian Government, the fake-left MSZP-led EU-financed pawns of the global financial oligarchy, whose regime was indeed an actual dictatorship to the strictest narrowest sense of the word. They deliberately mismanaged Hungary's economy then lied about the state of its economy in order to win the next election. Thereafter these fake left EU-puppets introduced a comprehensive package of the worst austerity measures to further undermine the country's economy, they dismantled the country's healthcare and education system, introduced high taxes for the poor, tax-cuts for the rich, fire-sold the countries most valuable companies and natural resources, meanwhile induced abject poverty, soaring unemployment, that is, deepening crisis for the majority in Hungary. In response to the sinister authoritarian MSZP-regime, in those days there were continuous mass-demonstrations, hundreds of thousands were flooding to the streets of Hungary, often surrounding the Parliament. The demonstrations and protests then were multiple times bigger in volume and scope; they were frequent and often accompanied with general strikes all over the country. That PM was just as unpopular and as dictatorial as those Hungary suffered under the communist times.
Then the dictatorial tyrannic MSZP-Government did not respond to these strikes and demonstrations as Orban does now, there was NO withdrawal from the measures the people protested against.
That government's response was brutal police violence injuring large masses including deaths, intimidation, political imprisonments of the peaceful demonstrations and even worse austerity.
Interestingly, or rather, obviously those mega-demonstrations were left entirely unnoticed and uncovered by the mass media.
After the MSZP-Government lost the next elections and Fidesz won, then they helped the country out of the social-economic ruins the former one left behind. Hungary repaid the national debt the former government accumulated, kicked out the IMF, refused to impose the EU-dictated austerity, and introduced policies via which the country achieved economic recovery. This is exactly why Orban is hated and viciously attacked by the EU and their mass media: because Orban DOES represent and serve the interest of the majority - as per democracy - rather than serving the richest minority of tycoons, corporations and banks.
Like I said, you do not understand,nor do you want, democracy.
Well, Orbán this morning has nixed the tax. So much fuss about nothing..... poor opposition (and their puppet masters at the US embassy), how will they now find a good enough reason to protest...
He has only nixed it temporarily, and will no doubt find a clever new name for it, and try to implement it next year.
But the large turnout has drawn the world's attention and opprobrium to it, so it has not been a storm in a teacup but a very timely and necessary reminder to the Fidesz mafia that they cannot do just anything they please, and still remain part of the European community where there are standards. Hungary cannot operate as in the bad old days of communism, with its isolationist mentality. We are now a connected world and when a country misbehaves, as Hungary is doing under Orbán and his oligarchs, then the world will know about it. And of course, that is precisely why Orbán wants to put a stop to unlimited access to international information and the internet.
He only withdrew the immediate implementation of the tax becausue he is scared of the enormous and unstoppable outcry against it, and of losing voters, and not because he gives a monkeys about HUngary's citizens. He cares only for his supporters, whom he rewards handsomely with untold wealth, lucrative jobs, and more, however unfit they are for ther new posts.
But people power will most certainly assert itself. Long live the protests and more power to their elbows.The world is watching and no matter how hard Orbán and his sychophantic tribe try to censor world opinion, it will not happen.
The internet tax was withdrawn in its present form. Instead there will be consultations on internet related matters starting in 2015. Essentially it was scrapped, some people already announced, they want to organize a "victory celebration" as a response to the internet tax's withdrawal.
The Internet tax must be Mr. Orban's generous gift to his opponents: its peculiar style of stubborn idiocy has united left and right in their loathing for the idea, not to mention the clueless and/or cynical government spokespeople attempting to justify it. What the moribund left could not accomplish in years, this scheme did - convincing tens of thousands of young people to go out and protest.
Where will it go? It is hard to guess. It is a symbolical, and very photogenic issue that pits "sympathetic protesters" against an "evil and out of touch big bad guy". Like most symbols, it represents a particular idea more than a single piece of legislation. But the current opposition is still too broadly disliked to seize the opportunity. The more they will try to claim the people out there, the more they will splinter off. If there was a fresh popular movement on the left, now would be the time to unfurl the flags and seize the day. But it isn't.
And meanwhile, many in the liberal old guard are openly clamouring for a coup d'état, from the USA, the European Union, anybody who would hear them and put them back in power. And these old men and women, filled by resentment and hatred for the voters who had rejected them, are the scariest little bunch on Hungary's current political landscape.
There is only one NGO complaining about freedom, the Norwegian one, that funds anti-government groups exclusively and distributes the funds on a way that is contrary to several laws and the NGO's stated purpose. Hungary has filed a complaint against that organization.
The American accusation of corruption started out as corruption in the government, than downgraded to individuals working in or for government agencies, than further downgraded to individuals who are Hungarian businessman and women. There was no proof, no names and no description of the crimes committed was given to the Hungarian government. After the fruitless inquiries the Hungarian attorney general contacted his American counterpart, Mr. Eric Holder to disclose the details of the crimes - so the Hungarian authorities can persecute the suspects. Now we are waiting for Mr. Holder's response - and unfortunately we know, how he isn't likely to give information when asked.
On the other hand it is very unusual for an ambassador or other high ranking representative of a country to participate in anti-government demonstrations in the host country. When did that happen last time? Mr. Goodfriend's presence is an expressed support to the demonstrators and such, it is a VERY unfriendly gesture from the United States, that lately doesn't pull punches, when there is a chance to hurt the governing parties of Hungary and Mr. Orban.
Mr. Goodfriend's presence is just normal expressed support to the demonstrators and a very friendly gesture from the United States .
Congratulations Mr. Goodfriend !
Mr . Orban , apparently , wants just taxation with no representation .
I have looked it up. It is extremely rare and unfriendly behavior in the USA foreign policy practices that an ambassador participates in demonstrations against the very country where he is representing the United States. So you are telling a lie.
You talk about taxation with no representation? Mr. Orban was re-elected with a 2/3 majority. Such a huge mandate doesn't happen very often. WTF are you talking about?
I'm looking forward to further unfriendly gestures towards the present Hungarian regime. We should start with suspension from NATO and the EU, with visas required at least for European borders. Mr Orban can then experiment by reversing earlier decisions until Hungary is accepted back again. He won't need to think very hard.
Fidesz loyalists know perfectly well that foreign observers, such as Mr. Goodfriend are within their rights to have political opinions. You just don't like them because they are critical of Orbán and his mafia cronies, who are benefititting enormously from EU funds?
Orbán has no problems rubbishing the EU when at home in Hungary, while sychophantically stretching his hand out for the huge sums of money coming into Hungary.
And any foreign criticsm of Fidesz meets with the infantile response... "but why are you all so horrible towards Hungary?" when in fact Orbánites know perfectly well that criticsm is directed towards Fidesz and Orbán, and not towards Hungary!
Or are they simply not educated enough to know the difference between themselves and their corrupt machinations, and a country?
Fidesz is not Hungary. Criticism of Fidesz,is not criticism of Hungary, though let's remind the gentle readers that Orbán, the great Hitler-esque, pugnacious and beligerent megalomaniac, has in the past declared that he is, in fact, Hungary!
One of these anti-tax protests turned into a violent wave of vandalism. Yet the police didn't shoot into the crowd with rubber bullets nor did it use tear gas to hit peaceful and vandal alike. Instead they tried to collect the actual troublemakers and left the peaceful demonstrators unharmed. This is how police works in a democracy.
In 2006 under the previous, Socialist government there were also many protests. Similarly most of the crowds were peaceful with a tiny minority being violent. What did the police do then? They started shooting the crowd with rubber bullets and tear gas. They shot at eye level intentionally blinding many peaceful protesters. This is how police is not supposed to work in a democracy.
Beware of Fidesz trolls here... They are paid to watch media (just as the Economist) and jump in immediately to protect their hero. You can recognize them by absurd expressions such as "Liberal Bolsheviks", clearly showing that the commenter does not know the meaning of any of these expressions.
On Okotars: how do you call when 42 policeman enter a private apartment to ask a document from a woman, who did not object? I call it pure intimidation. Even if all 42 behave "politely". About the allegations: they are changing them by the hour, since none of them turned out to be true. Besides, this NGO is handling Norwegian money, therefore the only body that should worry about it is the Norwegian authority, not a Hungarian, since no Hungarian taxpayer money is involved here.
As for the taxes: Hungary has the highest VAT on Earth: 27%. And besides the internet tax, there are other newly introduced ones, soap tax - my favourite.
Dear MSZP-SZDSZ trolls: as elections results have shown in the past 7 elections in Hungary (including referendums and local elections) it is your post-communist and liberal buddies who lack popular support in Hungary. Most people are incredibly disgusted by your hero, Ferenc Gyurcsany and for that reason they vote simply and effectively. In a way that keeps Gyurcsany as far from power as possible. No payment necessary, the actions of your kind is motivation enough.
"Besides, this NGO is handling Norwegian money, therefore the only body that should worry about it is the Norwegian authority, not a Hungarian, since no Hungarian taxpayer money is involved here."
Of course that is not true and incredibly stupid. Just because the money comes from a foreign source it does not mean it can be stolen freely. The money comes in based on a treaty. Money comes the same way from German and British taxpayers who send billions of euros to Hungary. Since no Hungarian taxpayer money is involved does that mean that these funds can be stolen freely? Let the German police worry about it and investigate? Of course not. Embezzlement is still a crime no matter the source of the funds.
What's next, if a Norwegian is killed in Budapest "the only body that should worry about it is the Norwegian authority, not a Hungarian," - to use your words?
In addition if your silly argument were accepted that would give Russia the ability to give money to NGOs for whatever purpose and it would be forbidden to investigate these NGOs.
"Besides, this NGO is handling Norwegian money, therefore the only body that should worry about it is the Norwegian authority, not a Hungarian, since no Hungarian taxpayer money is involved here."
what about this:
"The Beneficiary State shall be responsible for the management and control of programmes. The management and control systems established by the Beneficiary State for the EEA Financial Mechanism 2009-2014 shall ensure the respect of the principles of economy, efficiency and effectiveness."
You make some good points. And it might be interesting to readers who are not yet aware, that in Hungary, among Fidesz loyalists, the term "liberal" is a new and nasty euphemism for Jewish.
Antisemitism is rife among Orbán's gang, including a top Fidesz politico calling the former Isreali ambassador a "filthy Jew", and Orbán himself wishing his colleagues a "Jew-free goodnight..." and so on. All verifiable facts.
So the latest mindless Fidsez sloganising of wishing Hungary to be an "illiberal nation" has even more sinsiter overtones than one might think.
Another lie, this time a really, really nasty one. Everyone knows, that the socialists and communist are perpetuating racism and Jobbik is happily assisting them.
"In the meantime, government spokesman Zoltan Kovacs got into an angry Twitter exchange with Mr Goodfriend after he was spotted attending the protests on Sunday; the American said he had simply gone down to the demonstration to get his fair share of the views."
Mr Goodfriend is probably not too concerned about this Twitter exchange. He has far bigger problems now. Just recently, it seems Mr Goodfriend started a war of words with the foreign ministry of Russia who criticized him harshly. A slightly more powerful sparring partner than Mr Goodfriend is probably comfortable with. Also signalling that Mr Goodfriend is a more important player than his official title suggests.
Another possible problem for Goodfriend is the fact that more and more people are curious about him. While previously he could fly under the radar, he is now the focus of intense speculations and theories. For example, in the popular Hungarian talk radio show Lecso, Mr Goodfriend was asked if he had any connection to the CIA. In response he said "I have no secrets".
Did you ever meet a person, who was without any secrets?
The Liberal Bolsheviks next try to get back on the political agenda after they became almost negligible on the political pitch after another humiliating defeat on the local elections , becoming third behind the far-right JOBBIK .
Instigated by western liberals these mislead people make much noise but nobody will remember them by the next election .
Long Live Viktor !
"There is particular concern at recent police raids on non-governmental organisations and civic groups funded by Norway."
What complete fiction. There were no "police raids", there was a police search, which the Okotars employees themselves said was done "politely in a civil fashion". Look it up. So police never went to "civic groups funded by Norway" they only went to Okotars, who is DISTRIBUTING the funds from Norway (and is suspected of embezzling large part of these same funds for themselves)
But that is a minor issue compared to the claim that this police search was a "particular concern" to the protesters. The police is investigating Okotars for embezzlement, corruption, illegal financial activity, document forgery and other crimes. So the tens of thousands protesting are hardly doing it for the sake of NGO officials widely viewed as corrupt. And can you stop calling these people NGO's? If you get paid by a foreign government and act on behalf on a foreign government you are an FGO. Foreign Governmental Organization.
How many families have several smartphones and laptops in a country where the average monthly wage is $950?
Lots! I am from Hungary originally--I know their society will go to great lengths to keep up to the Jones'.
There is particular concern at recent police raids on non-governmental organisations and civic groups funded by Norway.
Can it be the reason that this organization (and not the other several tens of thousands) are engaged in political machinations, and definitely not in "civic" activities?
Those measures led American president Barack Obama, in a speech in September, to bracket Hungary with countries such as Egypt and Azerbaijan for its restrictions on civil society.
This simply means that idiocy can indeed freely enter the White House.
No one but the resident of the White House can state things like this .
This report has as much FACTUAL BASIS as the intelligence reports on the Iraqi WMDs used to have .
ZERO .
which is run by the Fuehrerprinzip.
Surely, Nazi Germany had a range of opposition parties, soclib radio and press....
from the 2015 budget, published today.
out: soccer stadium building: 95 billion
in: internet tax: 25 billion
If Orban stopped building empty soccer stadiums, he would not need internet & other special taxes.
Of course, the real purpose of the internet tax is not budgetary. It is his megalomaniac desire to subdue every part of society, to stifle independent thinking.
After the elementary and high schools, the television and radio stations, now it is the turn of the universities and the internet to submit to his party Fidesz, which is run by the Fuehrerprinzip.
How on Earth is holding back uncle Joe's extra 3 Dollars extra tax will subdue any part of the society or prevent him from independent thinking?
He reads his phone bill and realizes the extra line for this tax and dials the nearest government office to ask, what should he think this month? Are you kidding me?
I have no idea how this guy has such a high share of the vote with the maddness of his policies.
According to this the internet tax (before it was capped) was going to represent more than all the money made by companies supplying internet. Which essentially would mean the internet costs would have to at least double.
http://www.neweuropeinvestor.com/news/100000-join-protests-hungary/
It is because he is a popular leader, not the monster tyrant the Western liberal media tries to paint him.
This tax proposal was not thought through and it was a mistake. It is not the first mistake and will not be the first one corrected. Just remember, they wanted to introduce tuition fees for the university students who don't sign a promise of 5 years of working (and taxing) IN Hungary, who's taxpayers are footing the bill of their education. There was a large demonstration and the Fidesz gave up on charging tuition. Consequently the students get free of charge education in Hungary and go to work and pay taxes in other European countries. Not very nice of them.
In spite of his tendencies to make mistakes, it's quite possible that young Hungarian graduates will continue to leave and put off ever returning as long as the popular leader remains. Considering how wonderful he obviously is, it seems a bit paradoxical doesn't it?
There is already VAT on the internet bill, and service providers already pay corporate taxes as well. This new tax would be charged additionally to these. It was Orban's personal initiative, that's why many on the right were also caught by surprise.
There is nothing wrong with taxing data, it is a good like any other. But it should be an ad-valorem tax (VAT) like any other consumption tax, that is levied on the amount charged by the provider. Not a tax levied on a per gigabyte level.
As for the providers not being able to pass the cost on to consumers, any respect I had for the intellect of the Hungarian government just went out my window.