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May 1 2006

GSMA calls on Turkey to reconsider plans for a new 'Environmental Contribution' tax on mobile phone users

The GSM Association (GSMA) has called on the Turkish Government to reconsider plans to levy yet another new tax on mobile phone users, who already pay exceptionally high levels of tax. The GSMA, the global trade association for mobile operators globally, believes that economic growth in Turkey is being hampered by the very high tax burden on mobile phone users.

The tax burden on mobile phone users in Turkey is higher than in any of the other 49 countries analyzed in a recent GSMA study. The study found that 43% of the total cost of owning and using a mobile phone in Turkey is due to taxes, compared to an average of 18% across the 50 countries. If the Turkish Government goes ahead with plans to levy a US$9 tax on mobile phone users as part of an ' Environmental Contribution Fund ' , that gap will widen even further.

“Our research clearly shows that high taxes deter people from buying and using mobile phones and holds back economic growth,” said Tom Phillips, Chief Government and Regulatory Affairs Officer at the GSMA. “In countries where fixed-line phones are scarce, mobile phones play an important role in reducing transaction costs for businesses and making the economy more efficient.”

A 10% rise in mobile penetration* can boost a country’s annual economic growth by up to 0.6 percentage points per annum, according to research by London Business School. If Turkey were to lower mobile phone taxes, rather than increasing them, it would spur mobile phone usage, stimulate economic development and potentially increase the country’s overall tax base.

In Turkey, mobile phone users already have to pay a Special Communication Tax (25%), the Treasury Share Premium (15%) and Value Added Tax (18%) on each mobile phone call they make. In addition, they must pay a Special Communications Tax when they first take out a subscription (US$18), the Wireless License Fee (US$7.5), and the Wireless Usage Fee (US$7.5 per annum).

“Mobile phones have tremendous potential to give many millions of people in Turkey access to communication and information technology, as well as contributing to the development of the national economy,” added Phillips. “We stand ready to work with the government in any way that we can to help ensure that this potential is fully realised.”


* Mobile penetration is the proportion of the population that owns a mobile phone


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