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Brazilian regulator Anatel’s board of directors has approved a survey that addresses the very high payments made to the public purse by the telecommunications sector. It will be forwarded to the ministries of finance and communications, bodies responsible for studying and proposing legal changes related to the taxation of the sector. 

The Teletime news service reports that the study addresses three themes: the current tax system, the redesign of the tax system, and the redefinition of the tax burden.

It proposes a broad tax review, which, it seems, recognises the positive potential of a lower tax burden on service prices, quality and access to services, not least given the present situation. This is one of a high tax burden applied to telecommunications service providers in Brazil – one of the largest such burdens in the world, the report clams.

The report also points out that it’s not just the taxes themselves that are an issue but the complexity of calculating and policing them, itself an additional cost for the sector and for Anatel itself.

Anatel’s board has proposed a significant simplification of the tax system as well as a reduction of the tax burden. The president of Anatel, Carlos Baigorri, argues that this is both important and relevant  at a time when, apparently, the National Congress is discussing tax reform.

According to Anatel, the proposal is of paramount importance, but will government agree? Given recent similar sentiments from both Hungary and Nigeria, it will be interesting to see whether there is a positive response to Anatel’s report. We can probably take it as read that service providers will be supportive.

An otherwise uncontroversial recent MoU from Hungary on government and private sector telecoms cooperation nevertheless contained some significant points about taxation policy.

Late last week came the announcement that the government of Hungary and leading operator Magyar Telekom had signed a memorandum of understanding confirming their long-term cooperation « for the digital transformation of Hungary ».

In the memorandum Magyar Telekom said it confirmed its intention to promote the development of long-term sustainable fixed and mobile infrastructure as well as the rollout of services, contributing to the EU’s Digital Decade programme and the achievement of the 2030 objectives, in line with the country’s National Digitalisation Strategy.

Magyar Telekom says it now offers gigabit speed to more than 3.5 million homes and businesses and increased its outdoor population-based 5G coverage to 60% as part of its mobile network modernisation programme. Continuing these developments, Magyar Telekom is committed to build a gigabit-capable fixed network covering an additional one million households in four years, making a fixed gigabit-capable network infrastructure available to 4.5 million Hungarian homes and businesses by the end of 2027. 

The company says it will also accelerate the rollout of 5G coverage, resulting in an increase to close to 99% population-based outdoor 5G coverage by 2026. 

However, importantly, the government of Hungary confirmed in the MoU its intention to abolish the utility tax payment obligation of electronic telecommunication providers from January 2024, and the supplementary telecommunication tax from January 2025.

This joint statement underlines the point made in our April feature that the Hungarian government is “increasingly displaying its determination to boost the state’s role in the telecoms sector”.

However, it is interesting that, for now at least, the government seems to be avoiding the route popular with many governments of taxing a sector perceived as highly profitable. And it’s not alone. Back in July President Bola Ahmed Tinubu of Nigeria ordered the suspension of the 5% excise tax on telecommunications services in the country.

It’s unlikely that this is a trend; spectrum pricing and telecoms taxation are often seen as easy revenue wins by governments. However, the policy directions of Hungary and Nigeria hint at an acknowledgment from some quarters that the imposition of too many telecoms taxes can penalise end users and businesses as well as boosting the exchequer.

Undertaking a large development in any major city is daunting, especially when the development is as complex as a data center.  However, complicated doesn’t mean impossible, and a new entrant with local real estate expertise thinks they have found a unique way to crack it. Metro Edge Development Partners (Metro Edge) is preparing to kick off the buildout of IMD1, an exclusive five-story data center    to be located within the Illinois Medical District, just two miles west of the central business district of Chicago. With us today to talk about the project’s past, present and future is Metro Edge Co-Founder and CEO Craig Huffman. … [visit site to read more]

Keep up-to-date with all the latest news, articles, event and product updates posted on Developing Telecoms.
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