WASHINGTON, July 21, 2010 – According to a report released by the Global System for Mobile communications Association (GSMA), the key to spurring broadband adoption on in previously under-covered areas is targeted tax relief. According to the group’s summary of the study, “The study indicates how a reduction in special taxes applied to the telecommunications sectors in countries with different taxation approaches like Brazil, Mexico, Bangladesh and South Africa will translate into higher Mobile Broadband service adoption and more wealth creation reflected in additional GDP growth.”
The study’s methodology analyzed the relationship between mobile broadband adoption and tax rates in the four countries outlined above. Despite disparities in other areas, the study notes that every dollar reduced in taxes across Brazil, Mexico, Bangladesh and South Africa will generate additional GDP ranging between US$1.4 to US$12.6 through enhanced broadband uptake.
According to the group’s spokesperson, Tom Phillips, “The findings from today’s report clearly show how distortive taxation approaches in some countries can increase the Total Cost of Mobile Ownership (TCMO), negatively impacting development of Mobile Broadband. This report highlights the inconsistencies between regulations aimed at developing ICT sectors and policies that single out the services they deliver as ‘cash cows’ upon which taxes are levied.”