Telecoms industry groups GSMA and ETNO expressed concerns new global tax proposals targeting technology companies failed to recognise contributions made by their members to world economies, which they argued provide basis for certain exemptions.
In a joint statement, the groups welcomed the proposed Inclusive Framework for taxation of the digitalising economy which is backed by the Organisation for Economic Co-Operation and Development (OECD) and the G20. The plans aim to stop major global corporations from avoiding certain tolls by conducting activities online in low-tax jurisdictions.
However, the GSMA and ETNO argued the proposals did not take into account the telecom sectors’ global contribution to investment, tax and regulatory regimes.
They also highlighted the framework had shifted from its original purpose of levying taxes on digital services in jurisdictions where the customer resides, to a broader application subjecting large multinationals within the telecoms industry, “who already pay their fair share of taxes, to double taxation”.
The GSMA and ETNO noted the telecoms industry is already highly regulated, typically required a licence to operate in local jurisdiction, is heavily invested in local infrastructure and is subject to full income taxation in the countries in which their respective customers reside.
“Over and above other infrastructure providers, the telecommunications industry pays extensive unilateral Telecommunications Service Taxes in many markets, in addition to corporation income taxes, VAT and spectrum licences fees,” the pair stated.
The GSMA and ETNO believe the current proposal risked imposing excessive tax burden and discriminated against the industry.
Moving forward, they want the OECD and overall Inclusive Framework proposal to consider “a more equitable and balanced approach towards taxation of the telecoms sector”.Subscribe to our daily newsletter Back