Protesters in Budapest See Internet Tax as Attack on Democratic Freedoms

10-27-14 Budapest Internet tax protest
People hold up their mobile phones as they protest against a new tax on Internet data transfers in the center of Budapest, Hungary, on October 26, 2014. Laszlo Balogh/Reuters

Thousands of protesters took to the streets of downtown Budapest, Hungary, Sunday evening to protest a proposed tax on Internet use, part of what they view as increasingly anti-democratic legislation.

The demonstrators gathered in front of the Economy Ministry, their faces lit with the glow of their mobile phones. They then walked to Heroes Square, site of the city's Hall of Art, Museum of Fine Arts and Millennium Monument. According to the English-language news site Hungary Today, the protesters shouted "Viktator," "We want democracy" and "Europe" as they marched.

"Those who use the Internet see more of the world, that's why the government doesn't want a free Internet," Balazs Gulyas, a protest organizer, said Sunday.

The tax first came to light on Tuesday when Prime Minister Viktor Orban's government submitted to the parliament a draft of the 2015 budget, which proposed a charge of 150 forints ($0.62 or 0.49 euros) per gigabyte of data used.

Protest organizers called on people to join the demonstration in a press release, describing the tax as a "direct attack on our freedom of expression rights and our right to access information," which "risks disconnecting Hungary with global information and communication channels."

"The measure would impede equal access to the Internet—deepening the digital divide between Hungary's lower economic groups—and limiting Internet access for cash-poor schools and universities," organizers said.

Some made their way to the headquarters of the ruling Fidesz party, where they lobbed old computer parts like monitors and keyboards at the building, despite the fact that the organizers had called for the protest to be free of violence. Two windows were broken, and six people were detained by authorities.

''What the protesters did to the building was unbelievable, brutal vandalism,'' Mate Kocsis, a spokesman for the Fidesz party, said on state radio Monday. ''It's not the first time the Fidesz headquarters was attacked, but we can hardly recall such severe damage.''

Interesting to see the nature of crowds in Budapest. Internet tax march seemed large & orderly w/good police support

— M. Andre Goodfriend (@GoodfriendMA) October 26, 2014

Seeing the news reports of vandalism during the march as well, which I condemn. Not as orderly as it seemed where I stood.

— M. Andre Goodfriend (@GoodfriendMA) October 26, 2014

Hungary's Economy Ministry anticipated the tax would bring in 20 billion forints ($82.5 million) per year, though experts predicted the amount could be significantly higher, according to The Associated Press.

Orban's government issued a statement Sunday, while protesters were still in the streets, announcing that it would amend its proposal, capping the tax at 700 forints ($2.87) per month. In addition, the tax would be paid by Internet providers rather than individual subscribers.

But Gulyas said that if the government did not fully withdraw the bill within 48 hours, protests would continue Tuesday. The Facebook page of the protest organizers, titled "100,000 against the Internet tax," continues to be active, with more than 215,000 likes as of Monday morning.

The protest organizers say the proposed tax "follows a wave of alarming anti-democratic measures by Orban that is pushing Hungary even further adrift from Europe." The prime minister, who was reelected this past April to a second term, has previously instituted a tax on advertisement revenue for all nonpublic media outlets, as well as taxes on the energy, banking and telecommunications industries to "plug budget holes and reduce the deficit to below the EU's 3 percent of gross domestic product limit," according to Bloomberg Businessweek.

The Internet tax would be a "double tax on us, as I have already paid a sky-high VAT when I bought the gadgets, computer and router," Attila Sos, who came to the protest, told Reuters. "This is a good occasion for a lot of people to come here to show that they are discontent with the government's tax and economic policies. This was only the icing on the cake."

Proposed internet tax in #Hungary is a shame: a shame for users and a shame on the Hungarian government. I do not support!

— Neelie Kroes (@NeelieKroesEU) October 22, 2014

It is terrible that govt of #Hungary thinks it can reduce media freedom, target media owners and then tax the alternative. Wrong direction!

— Neelie Kroes (@NeelieKroesEU) October 22, 2014

"This is the next logical step for Mr. Orban, having dismantled the cornerstones of a democratic, pluralistic society step by step over the last five years," the organizers said. "His declared aim is to move Hungary away from the family of democratic, liberal societies and make it look like Putin's Russia."

The protests came just one day before the Information Technology and Innovation Foundation (ITIF) released a report warning that raising taxes on information and communications technology could slow economic growth, The New York Times reports.

The report found that over 10 percent of the 125 countries included in its study have raised information and communications technology (ICT) taxes and tariffs to very high levels, with Bangladesh, Turkey, and Congo leading the pack. In other words, at least 31 countries have a combined tax and tariff rate on ICT goods and services that is over 5 percent, which slows adoption of these technologies and, subsequently, economic growth.

"It's one thing to tax things like cigarettes and alcohol at a higher rate, because it makes sense for governments to want to limit consumption of these kinds of products," Robert D. Atkinson, president of the ITIF and a co-author of the report, told the Times. "But to do this for one of the most important technologies to drive productivity and innovation is self-defeating."