New Hungarian Telecoms Tax Will Harm Economic Recovery

LONDON, May 17, 2012 /PRNewswire/ -- The Hungarian government has submitted a bill, effective from July 2012, for an additional telecommunication tax, which foresees a budget shortfall of around euro 140-170m (HUF 40-50bn) annually. The government plans to use the new incomes for further budget consolidation. The bill submitted to the Parliament contains a tax levied on the providers of telephone and messaging services. This approach to levy the tax on providers is similar to the existing telecommunication tax, introduced in 2010, which is currently being challenged by the European Union Commission at the European Court of Justice. Previously the Hungarian government promised to phase out the existing tax without substitution; however this 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, Director General 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."

ETNO
ETNO's 40 member companies and 10 observers from Europe and beyond represent a significant part of total ICT activity in Europe. They account for an aggregate annual turnover of more than euro 600 billion and employ over 1.6 million people. ETNO companies are the main drivers of broadband and are committed to its continual growth in Europe. For more information, please visit www.etno.eu.

GSMA
The GSMA represents the interests of mobile operators worldwide. Spanning more than 220 countries, the GSMA unites nearly 800 of the world's mobile operators, as well as more than 200 companies in the broader mobile ecosystem, including handset makers, software companies, equipment providers, Internet companies, and media and entertainment organisations. The GSMA also produces industry-leading events such as the Mobile World Congress and Mobile Asia Expo. 

For more information, please visit the GSMA corporate website at www.gsma.com or Mobile World Live, the online portal for the mobile communications industry, at www.mobileworldlive.com.