Nokia Moans to Lula About SP Taxation on Mobiles

The president and CEO of Finnish mobile phone maker Nokia, Olli-Pekka Kallasvuo, has complained to Brazil's President Luiz Inácio Lula da Silva that São Paulo (SP) state is applying unfairly high taxes on its phones produced in Amazonas state, newspaper Valor Econômico reported.

In a meeting with Lula, Kallasvuo and Amazonas state governor Eduardo Braga complained that São Paulo charges 18% state value added tax (ICMS) on mobile phones produced in the duty free area (Zona Franca) of Amazonas state capital Manaus, while other states tax only 7%.

Meanwhile, mobile phones produced in São Paulo have zero taxation, according to Braga. "This is discrimination."

Nokia has invested US$100mn over the last five years in Amazonas state and is the fifth largest employer with 5,000 workers.

Worldwide mobile phone sales reached 991mn units in 2006, a 21.3% increase from 2005. Nokia continued to lead the industry with a 34% market share globally compared to 32.5% the previous year.

Nokia's rivals, US manufacturer Motorola and Korean company LG, produce mobile phones in São Paulo, the newspaper reported."

Posted to the site on 8th March 2007