The EC has launched an infringement procedure against Hungary, the centre-right government of which imposed taxes on several profitable business sectors to boost budget revenues and meet is budget deficit targets. Hungary introduced special charges for telecoms operators in October 2010. The Commission this time has concerns that this tax is incompatible with EU telecoms rules, which require specific charges on telecoms operators to be directly related to covering the costs of regulating the telecoms sector. Hungary has two months to reply to the request, which takes the form of a so-called 'letter of formal notice, the first stage of EU infringement procedures. The Commission has just decided to refer France and Spain to the EU Court of Justice concerning similar 'telecoms taxes'. László Kovács, former European Commissioner and present vice-chairman of MSZP added it wouldn’t be surprising if new proceedings were started against Hungary after the rotating presidency. He thinks that the regulation of the excise tax clearly offends European norms, and levying reduced VAT-rates also contradicts EU law. According to Kovács it is possible that procedures would start because of certain extraordinary taxes levied on other sectors too, because they were imposed unexpectedly, retroactively, without consultation and not on the profit but on the revenues. László Kovács added he thought that the proceeding on the extraordinary ‘telecoms tax’ would be launched after the Hungarian rotating presidency, but the fact that it happened earlier refers to the rapidly decreasing favor of European institutions shown towards the Hungarian government.

Last Updated on Thursday, 19 May 2011 12:20