Hungary Plans To Levy HUF100 Tax Per Meter of Utility Infrastructure

By Margit Feher

BUDAPEST--Hungary plans to levy a tax from Jan. 1 on all utility infrastructure owned or operated by firms in private ownership to ensure its budget deficit remains comfortably below the European Union's tolerance threshold and thus keep access to vital funds.

The tax is planned to amount to 100 forints ($0.447) per meter, or 3.28 feet, state news agency MTI said Friday, based on the bill submitted to parliament.

For infrastructure owned by the government and municipalities, the operator will pay the tax. Telecommunications companies owning less than 100,000 meters of cable would only pay half of the planned tax.

The tax would be levied on infrastructure that runs across publicly owned land. The infrastructure to be taxed includes drinking-water, rain-water and sewage pipelines; natural-gas, heat and electricity lines; and telecommunication lines.

Hungary's largest telecommunications companies include units owned by Deutsche Telekom AG (DT), U.K. firm Vodafone Group PLC (VOD), and Norway's Telenor ASA's (TELNY). The biggest energy firms include German utility giants E.ON AG (EON) and RWE AG (RWE.XE), and Hungarian oil and gas company MOL Nyrt. (MOL.BU).

The government plans to raise 30 billion forints ($134.2 million) a year from the new tax, which companies will need to pay in two equal installments, by March 20 and Sept. 20.

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