Taxing mobile connectivity in Latin America. Impact on connectivity and tax revenues 

Mobile connectivity in Latin America has undergone a major transformation since the first 2G rollouts in the early 2000s. Initially, it was perceived as a luxury service for the highest-income groups in the region, but access became widespread as device and plan costs declined and technological advances in 4G and 5G emerged. 

In the early stages, when the impact of connectivity was more limited, many governments in the region applied sector-specific taxes to mobile connectivity as an efficient way to generate tax revenues. Over time, the result has been a significant imbalance between the direct economic contribution of mobile services and the levels of taxation to which they are subject. 

In 2023, sector-specific taxes on mobile connectivity in Latin America amounted to approximately USD 4.65 billion, equivalent to 6.5% of the total cost of connectivity. 

Users are subject to sector-specific taxes when purchasing devices and when activating and using mobile services. These have the most regressive effects, as they raise the cost of access and make it unaffordable for lower-income populations. 

Mobile connectivity providers are also subject to sector-specific taxes. These absorb resources that could be allocated to address the region’s main challenges, such as closing the connectivity gap, expanding coverage, improving service quality, and accelerating the deployment of new technologies. 

Through an econometric study, «Taxing mobile connectivity in Latin America. Impact on connectivity and tax revenues» analyzes taxes and fees on the mobile sector in 18 countries in the region and how they affect both tax revenue and digital inclusion.