Tax impact on mobile growth

Tax impact on mobile growth

The GSMA (GSM Association ) is not just taking a low-cost handset initiative for emerging markets, it also tries to limit the impact of everything that can increase the cost of those handsets, such as local taxes. A study conducted by Pyramid research, Frontier Economics, Deloitte & Touche and Tarifica in 50 developing countries found that taxes represent more than 18% of the total cost of owning and using a mobile phone in 16 of the 50 developing countries. Tax amount could vary from 7% in Asia to 55% in some Middle East countries, and reach over $40 a year. That can double the cost of purchasing a $30 low-cost handset.

Of course, the only alternative solution there is the black market that can contribute to about 40%-50% of handsets sold last year in the 50 studied markets. If import and sales taxes were removed, an extra 150-200m low-cost units could be sold legally each year.

Could governments understand the problem and correctly manage adequate solutions.