By Margit Feher
BUDAPEST--Hungary will offer a tax incentive from next year
allowing telecommunications companies that are modernizing existing
or building a new Internet network to delay their tax payments, a
government official said Thursday.
The tax incentive will also be granted to utility companies as
well, but only for the construction of a new network, such as power
distribution and natural gas supply pipelines, Andras Tallai,
deputy economy minister, said at a press conference before the
government submits next year's tax plans to parliament.
Under the tax incentive plan, companies with various utilities
networks will only be required to pay the utility tax in the sixth
year after the new stretch--or in the case of Internet networks the
modernized stretch--comes into use, the official said.
In 2012, Hungary imposed a special tax on all utility networks
by the meter. The levy was part of its taxes on a variety of
sectors introduced in 2010 to boost budget revenue after the 2008
financial crisis, instead of implementing fiscal austerity.
Industry experts have said the utility tax has been a hindrance
to the development of broadband Internet in particular in
underdeveloped areas of the country.
Hungary sold various unused broadband spectrum licences in
September last year for a total of 130.6 billion forints ($479.4
million) to Magyar Telekom Nyrt., which is majority-owned by
Germany's Deutsche Telekom AG, a local subsidiary of Norway's
Telenor ASA, the Hungarian unit of Vodafone Group PLC, and cable
and new market participant satellite television and internet
provider Digi.
In October 2014, tens of thousands of Hungarians protested at
government plans to introduce a tax on Internet use by traffic as
measured in gigabytes.
Write to Margit Feher at margit.feher@wsj.com; Twitter:
@margitfeher
