The GSMA today applauded the decision of Senegalese president, Maître Abdoulaye Wade, to suspend surtaxes on inbound international calls and urges other governments who have recently lintroduced such taxes to take similar action. The decision to suspend the tax comes after weeks of intense dialogue between the public and private sectors. The issue was highlighted at the recent International Telecommunications Union (ITU) Global Symposium for Regulators held in Dakar, Senegal on 9-12 November where the GSMA intervened directly on behalf of consumers to seek a removal of the tax.
“Following our constructive dialogue with governments, we are delighted with the leadership shown by Senegal in suspending this counterproductive tax. Around 95 per cent of international traffic is carried over mobile networks, so mobile consumers will immediately benefit from lower international calling rates,” said Isabelle Mauro, Head of External Affairs, GSMA. “Such taxes typically have a negative impact on international competitiveness, lowering the amount of foreign direct investment and hitting trade flows to and from the country, thereby having a direct impact on consumers. We call on other governments that levy taxes on inbound international calls to take similar action immediately”, she added.
There are several ways in which such taxes are implemented but they all share a common theme: governments require national telecommunications carriers to collect an additional fee for incoming international calls from carriers they are interconnected to. The tax is usually then shared between an intermediary and a government body. Creating such artificial inflation in international calling prices is ultimately a counterproductive move for governments. Higher prices cut the number of calls consumers can afford to make, which in turn leads to lower revenues for operators and a reduction in the tax levied from those lower revenues.
Importantly, governments that levy such taxes are breaching the ITU’s 1988 Melbourne Convention, which stipulates that taxes on incoming international calls will be paid in the country of origin. Further, the tax also contravenes the 1988 World Trade Organisations agreement on telecommunication services, which suggests that taxes should not be higher than local interconnection rates. Both binding documents state that no tax should be applied to incoming international calls.
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About the GSMA
The GSMA represents the interests of the worldwide mobile communications industry. Spanning 219 countries and territories, the GSMA unites nearly 800 of the world’s mobile operators, as well as more than 200 companies in the broader mobile ecosystem, including handset makers, software companies, equipment providers, Internet companies, and media and entertainment organisations. The GSMA is focused on innovating, incubating and creating new opportunities for its membership, all with the end goal of driving the growth of the mobile communications industry.
Daniel Lowther: +44 7747 636 687 begin_of_the_skype_highlighting +44 7747 636 687 end_of_the_skype_highlighting