The GSMA Association recently released its “Delivering Mobile Connectivity in the Middle East and North Africa” report, projecting mobile connectivity would be improved in Algeria, Egypt, Jordan, Morocco, Saudi Arabia, Tunisia and Turkey if the seven countries implement tax reforms.
“In the Middle East and North Africa, mobile connectivity is a critical enabler of economic growth and social development, amounting to 1.4 percent of the region’s GDP,” GMSA Chief Regulatory Officer John Giusti said. “However, in the seven markets analyzed, taxation behaviors, ranging from high revenue fees to special taxes on mobile communication services or handsets, negatively affect affordability for consumers and industry investments. In the current economic climate, governments should be inclined to foster, not hinder, economic growth.”
Taxes on mobile devices keep low-income consumers out of the market. In Egypt, the value-added tax rate for mobile services is 8 percent higher than other rates, while complex regulatory fees discourage investment in the country’s mobile networks and services. Algeria faces a similar complex tax structure that impedes the mobile industry.
“There is unique opportunity for governments in the Middle East and North Africa who want to champion even greater connectivity and digital inclusion,” Giusti said. “Reducing excessive sector-specific taxation will benefit consumers, businesses and governments by reducing costs, encouraging the take-up of new mobile services, and boosting GDP and overall tax revenues in the longer term.”
