Study Faults High Cellphone Taxes

The Wall Street Journal writes that "high taxes on the sale and use of mobile phones are complicating efforts to bring low-cost, mobile communications to people in the developing world." The study of tax rates and cellphone usage in 50 sample countries was conducted by Pyramid Research and Frontier Economics on behalf of the GSM Association. The study concluded that eliminating value-added and customs taxes on low-cost phones would increase mobile-phone "penetration" by between 9.8 and 19.6 percentage points.

According to the study, "cutting taxes could increase overall tax revenue in the 50 countries by $25 billion to $45 billion (€21 billion to €37 billion) over five years." The study also found that in 14 of the 50 countries surveyed, "the average wireless subscriber pays more than $40 a year in mobile-phone related taxes."

For example in Turkey, "taxes represent around 43 percent of the total cost of owning a mobile phone."