eInclusion.hu – Tudásbázis

STATEMENT

The expansion of the cultural contribution payment to internet access service and network development (i.e. the introduction of the so called ‘internet tax’) is deceptive and contrary to the intentions of the EU and the Hungarian government aimed at the development of the information society and the enhancement of economic competitiveness. The signatory civil and industry bodies – in agreement with the concordant position of the Ministry of Economy and Transportation (GKM) – call on the members of Parliament to refrain from supporting Bill T/5395 on the Amendment of Act XXIII of 1993 on the National Cultural Fund.

In Europe, 2008 was designated to be the year of ‘e-inclusion’. Accordingly, market players, civilian organizations, and the state are making outmost efforts to enable more people to live with the possibilities offered by computer technology and the internet, thereby improving individuals’ quality of life and employment opportunities, as well as the competitiveness of the economy. Hungary, on the other hand, is preparing for the introduction of an “internet tax,” which would contradicts these efforts in every way.

• In terms of digital literacy, the situation in our country is quite unfavourable: almost half of the adult population is digitally illiterate, i.e. cannot use computers or the internet. Internet usage among the population and companies remains significantly below the EU average, and the use of information society services also falls behind in comparison with most countries that have joined the EU at the same time as Hungary. By placing a financial penalty on the roll-out and use of the infrastructure of digital literacy, the ‘internet tax’ in its current form would work against the nation’s development and the improvement of its economic competitiveness.

• The introduction of an ‘internet tax’ – irrespective of its magnitude – would be a step that is contrary to all published national and EU-level programs. In the European Union – in accordance with EU recommendations – all member states support the the further development of internet access and the further penetration of internet usage, with a particular emphasis on e-government. With the introduction of the ‘internet tax’ Hungary would not only convey a negative message to service providers and consumers, but also risk development policy objectives based on broad consensus in exchange for short-term revenues in a manner unprecedented in Europe.

• Although the planned rate of the ‘internet tax’ is only 0.8%, the basis for it would be the operators’ revenues in lieu of their profit, which will considerably decrease results of their operations. The operators therefore would be forced to shift the fallout (approx. HUF 1.5 billion per annum according to our calculations) onto subscribers or hold back investment on network development. In either case, the ‘internet tax’ is contrary to the objectives related to the development of an information society.

• The current proposal would not only generate excess burdens on the consumption of cultural and entertainment internet content but also on e-government services, other public and health services, and the users and providers of information society services, including hospitals, doctors, internet community houses, and small businesses. The ‘internet tax’ in its current form is against the recent intentions and actions of the government: it would also increase the costs of electronic administration.

• No impact analysis has been made or disclosed to industry bodies concerning the introduction of the ‘internet tax’. This is not only against any common sense but also contradicts Hungarian legal requirement, particularly the Act on Legislation, which prescribes the analysis of a proposed law’s social and economic aspects as well as the potential regulatory impact as a precondition to passing legislation. The proposal on the ‘internet tax’ has been brought forward without the required analysis of impacts on the development of an information society or on digital literacy.

• The new tax hinders all those state, market, and civilian initiatives that target the increased penetration of internet usage and digital literacy. The ‘internet tax’ – irrespective of its magnitude – conveys the wrong message in a country that has explicitly announced the development of the information society and the take up of digital literacy among its objectives, incorporating these goals into the government’s program

We are aware that securing financing for cultural programs is a difficult issue in Hungary. The signatories of this letter have contributed significantly to ensuring that financing and will continue their support in the future. On the other hand, we are convinced that the ‘internet tax’ in its current form – apart from increasing the sources of the Ministry of Education and Culture and the National Cultural Fund – would cause considerably greater losses for Hungary than the value it would provide.

Signatories of this letter express their explicit intention to enter into talks with the representatives of the Ministry of Education and Culture and the National Cultural Fund concerning the future expansion of the cultural contribution fund and to reach an agreement based on compromise that is acceptable to market players, industry bodies, and the Ministry of Education and Culture. The withdrawal of the current proposal on the ‘internet tax’ – which is considered foredoomed by industry and civilian organizations and the market players – is a prerequisite of this.

Budapest on April 23, 2008

Zsolt Menyhárt
Alternative Telecommunications Service Providers Association
Dr. Róbert Pintér
BME Information Society and Trend Research Institute
Dr. Erika Mayer
Infomediator Information Society Consumer Protection Agency
János Keresztesi, Péter Gögge
Association of Information Technology Companies
Gábor Dombi
Inforum
Balázs Martos
Council of Hungarian Internet Providers
József Mlinarics
Hungarian Association of Content Industry
Róbert Pintér
Hungarian Association of Content Providers
Gábor Szenes
Netrekész Public Non-Profit Company