Argentina Planning Higher Taxes on Mobile Phone Imports

The GSM Association (GSMA) says that it is concerned about plans to raise taxes on mobile phones in Argentina. The bill seeks to extend internal taxes on mobile handsets to a 17% nominal rate for imports and/or sales which are not produced in the Tierra del Fuego special economic zone.

"This measure will clearly have a significant counter effect on the expansion Argentina was showing, as well as its plans to promote greater digital inclusion, which led the ITU to rank the country first in Latin America," said Ricardo Tavares, Senior Vice-President of Public Policy, GSMA.

This bill has been under discussion at the Lower House and was going to be submitted to vote without opportunity to debate in the House Commission of Telecoms. The reasons given by the government are that handsets are part of a set of "luxury" goods with "high energy consumption", a classification that the GSMA feels is incorrect. This measure will affect almost all consumers of telecommunications services across the country, which already boasts more than 43 million mobile connections. Only 2% of mobile devices are produced in Tierra del Fuego, therefore, 98% of devices will incur a higher price and will potentially greatly reduce people's access to telecom services, affecting consumption and the overall national economy.

"Significant mobile growth over the last five years has enabled Argentine citizens, despite income level, to gain access to telecommunications services," said Tavares. "Millions of Argentines will see an increased cost of 17% on a product that is an essential working tool for SMEs, independent workers, students and entrepreneurs. The GSMA is concerned that taxation is being considered at this time of financial crisis and feels that it would serve to restrict productivity, employment, community development, economic growth and social inclusion."

This GSMA notes that this type of taxation has proved counterproductive in other countries where it has been implemented, affecting consumption and therefore tax revenue.

Posted to the site on 8th June 2009