PRN: New Hungarian Telecoms Tax Will Harm Economic Recovery
New Hungarian Telecoms Tax Will Harm Economic Recovery
LONDON, May 17, 2012 /PRNewswire/ --Â The Hungarian government hasÂ submitted a bill,Â effective from July 2012,Â for an additional telecommunication tax, which foresees aÂ budget shortfall ofÂ around euro 140-170m (HUF 40-50bn) annually.Â The government plans to use the new incomes for further budget consolidation. The bill submitted to the Parliament contains a tax levied on theÂ providers of telephone and messaging services.Â This approach to levy the tax on providers is similar to the existing telecommunication tax,Â introduced in 2010,Â which isÂ currently beingÂ challenged by the European Union Commission at the European Court of Justice.Â Previously the Hungarian government promisedÂ to phase out the existing tax withoutÂ substitution;Â however thisÂ new tax now causes a double burden on the industry and Hungarian consumers.
"The new telecommunication tax is very harmful not only for the telecommunication sector, but for overall economic growth," said Luigi Gambardella, ETNO Executive Board Chairman. "At the moment when European leaders are pursuing a new growth strategy to help the Union to get out of the economic crisis, the Hungarian government is counteracting this highly welcomed European initiative in setting up additional tax burdens. The tax will directly affect consumers, will increase prices and hinder growth. The telecom sector is a platform for innovation. Governments should rely on the enabling power of the telecom sector as a facilitator for growth and not harm these potentials."
Anne Bouverot, DirectorÂ GeneralÂ GSMA, reminded: "In the current economic climate, it is vital for governments to foster, not hinder, economic growth. The increased burden that this additional tax creates will affect the ability of Hungarian operators to serve their customers' needs and so we ask the Hungarian government to review their tax strategy with a view to adopting a more positive approach."