Hungary scraps internet tax plans

Budapest - Hungary's plan to tax internet data traffic has been scrapped, Prime Minister Viktor Orban said on Friday, following mass rallies in Budapest against the proposed law.

"The tax cannot be introduced in its current form because the discussions have derailed," Orban told state radio.

But he left the door open to reviving the plan, saying a "national consultation" on the matter would be held in January.

The conservative premier has been under pressure to drop the tax, with tens of thousands of protesters taking to the streets of Hungary's capital earlier this week in the largest anti-government rallies in more than two years.

The draft law would have imposed a 150-forint (62c) fee per gigabyte of internet data transmitted, beginning in 2015. It set a maximum charge of $4.46 per month for private users.

The government had justified the levy on the grounds that it was only widening a telecommunications tax already in place to encompass the growing amount of online data.

Media controls

In the interview, Orban also defended the tax on the grounds that internet service providers were reaping "serious profits" that the government deserved to have a slice of.

He conceded, however, that people began to "question the rationality" of the proposal.

"We are not communists. We do not rule against the people, but with the people," he said.

Orban, who first served as prime minister from 1998 to 2002 and assumed office again in 2010, has frequently clashed with the EU, which Hungary joined in 2004.

Constitutional changes he pushed through that tightened government media controls and reduced the authority of the Constitutional Court, a key controller of legislative action, have met some of the sharpest criticism.

The internet tax - which would have been the first of its kind in Europe - was slammed by the European Commission as "wrong" and part of a "troubling" pattern of curbed freedoms in the Eastern European country.

"I'm very pleased for the Hungarian people. Their voices were heard," said EU Digital Agenda Commissioner Neelie Kroes, after Orban's announcement.