Digital inclusion and mobile sector taxation 2015 - GSMA

including handset and device makers, software companies, equipment ..... VAT on handsets, in addition to custom duties on imported devices that are in ... In many developing countries, consumers face higher taxation on mobile than on other ...
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Digital inclusion and mobile sector taxation 2015

Copyright © 2015 GSM Association

Digital inclusion and mobile sector taxation

About the GSMA The GSMA represents the interests of mobile operators worldwide, uniting nearly 800 operators with more than 250 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and Internet companies, as well as organisations in adjacent industry sectors. The GSMA also produces industry-leading events such as Mobile World Congress, Mobile World Congress Shanghai and the Mobile 360 Series conferences. For more information, please visit the GSMA corporate website at www.gsma.com

This report has been prepared on the basis of the limitations set out in the engagement letter and the matters noted in the Important Notice From Deloitte on page 1. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms. Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 2 New Street Square, London, EC4A 3BZ, United Kingdom. Deloitte LLP is the United Kingdom member firm of DTTL.

Follow the GSMA on Twitter: @GSMA Contact: Davide Strusani TMT Economic Consulting, Deloitte [email protected]

Digital inclusion and mobile sector taxation

Contents Important Notice from Deloitte

2

Executive summary

3

1

Digital inclusion, mobile taxation and economic growth

19

1.1

This review

20

1.2

Benefits and barriers to digital inclusion

20

1.3

Affordability, investment and mobile taxation

25

1.4

The benefits of a balanced taxation structure

27

2

Taxation on mobile consumers

29

2.1

Taxation on mobile consumers

31

2.2

Mobile-specific taxation on consumers

33

2.3

Mobile-specific taxation on usage

36

2.4

Mobile-specific taxation on devices

39

2.5

Mobile-specific taxation on activation

42

3

Taxation and other fees on mobile consumers and operators in 26 selected countries

49

3.1

Total mobile tax and fee payments

50

3.2

Total tax and fee payments from mobile-specific taxation

54

3.3

Taxes on profits and revenues

56

3.4

Regulatory and spectrum fees

58

3.5

Import duties on network equipment

60

4

Transitioning to a taxation structure where mobile is treated equally to other services

61

4.1

Principles of taxation best practice

62

4.2

Options to align mobile taxation to standard goods taxation

64

Appendix A: Methodology

65

A.1

66

Countries included in this review

A.2 Mobile consumer tax

67

A.3 Total mobile tax and fee payments

70

Appendix B: Country Tables

71

Digital inclusion and mobile sector taxation

Important Notice from Deloitte This report (the “Report”) has been prepared by Deloitte LLP (“Deloitte”) for the GSMA on the basis of the scope and limitations s