Digital Inclusion and Mobile Sector Taxation in Mexico
Mobile services in Mexico connect over 47 million people, equivalent to 38% of the population, and deliver widespread social and economic benefits to the country. Mobile broadband has the potential to further support the growth of the knowledge economy. In this context, tax policy can support economic and social development and the government’s telecom reform initiatives to further drive increased mobile network coverage and competitive prices. Higher taxation on mobile compared to other goods and services risks increasing the affordability barrier leading to reduced access and growth in the mobile industry, a key sector driving Mexico’s economic and digital growth.
In Mexico´s case, the IEPS (Impuesto Especial Sobre Producción y Servicios) adds to the overall cost of owning and using a mobile phone, of which 19% is accounted for by taxes in Mexico; annual regulatory fees contribution to the government, by mobile operators, is among the highest globally; recurring tax and fee payments in 2014 contributed by the mobile industry reached more than USD 4.5 bn, representing 1.5% of total government tax revenues in Mexico.