(PRWEB) July 06, 2017
Global Voice Group’s Interconnection Management System (IMS) leverages ICTs and real-time data technologies to allow telecoms regulators to monitor any country’s national and international interconnection traffic efficiently. In this way, the IMS allows for the accurate calculation and billing of levies to be paid to government by the telecoms companies from the interconnection rates. This, in contrast with the self-declaratory systems which used to be prevalent in these countries leaving many loopholes for dishonesty and fraud.
In fact, GVG pioneered this innovative approach to providing revenue for government coffers commencing with emerging countries in Africa. This system has now become a reference across the world from Africa to other countries and regions and is helping many governments raise revenue to address burning development platforms in their countries.
According to the GSMA in 2011, in addition to general sales taxes, some 63 countries were already levying mobile-specific taxation on citizens—with Europe showing the highest average tax as a proportion of total cost of mobile ownership (TCMO). Many countries have also adopted—or are in the process of adopting or considering—levies on mobile traffic volumes (taxes, regulatory fees, or premiums).
This is because an excise tax on mobile airtime services poses a small risk but presents an attractive revenue opportunity for governments to assist them to fund socio-economic development. In emerging countries with poor landline systems, mobile telephones can contribute to growth and development by facilitating the creation of new market networks and reducing the need for expensive transportation. Excise on mobile airtime is therefore becoming increasingly popular in many countries. In 2011, over 20 countries imposed an airtime tax, the majority of which were located in Africa. Other regions have since also adopted these taxes.
Some examples of the application of these mobile airtime taxes are:
- United States
Americans pay an average of 17.05% in combined Federal, State and local tax and fees on wireless service (5.82%
Federal rate and average 11.23% State-local tax rate). With State and local governments continuing to face revenue challenges, the wireless industry and its customers are an attractive target for raising new revenues as evidenced by the targeting of wireless customers by the city of Chicago in 2014.
From the beginning of 2016, the French government raised the Internet Service Provider (ISP) fee from 0.9% to 1.2%. This is so as to increase the funding of public broadcasters.
The Haitian government raises ±$40 million per year through a 23c per minute levy on mobile telecoms which funds the National Education Schooling for All Programme (PSUGO) to assist needy Haitian children to go to school free of charge.
As early as 2012, Christine Lagarde, managing director of the International Monetary Fund voiced her support for a Sin Tax Bill in the Philippines—seeking to collect P40 billion from additional taxes levied on alcohol and tobacco. Revenues from these sin taxes would be allocated to health care services in the country. She also suggested that revenue could be raised by micro-surcharges on mobile phone services: text messaging and calls. Surveys have credited the Philippines as being the most prolific country in sending SMS messages. Text/telephone coverage is in the range of 112% in the Philippines which means a proposed micro-surcharge will be a small rate over a broad base—the criterion for a good tax.
- St Vincent and Grenadine
New and increased taxes for St Vincent and Grenadine were announced in the 2016 budget in parliament. Citizens will start paying taxes on cellphone and international calls and Value Added Tax (VAT) on some items that were once VAT-free to contribute to government’s plan to reduce poverty in the country.
The IMF suggested a Reform Roadmap for Simplicity and Revenue Buoyancy in 2014 to overhaul all the taxes in Barbados, reduce exemptions from tax—which have eroded the tax base—and provide incentives for investment. In Barbados there were 122.5 mobile telephone subscriptions per 100 inhabitants in 2012—a number substantially above the global average of ± 94 calculated over 228 countries. In fact, the Minister of Finance proposed an excise duty on mobile airtime minutes in the 2015-2016 budget. The proposed excise rate is BDS$0.03 per minute—a micro amount in comparison, for instance, with Honduras, which imposes a 3c tax per minute on international incoming voice traffic and Jamaica a $ 0.075 per minute tax on international incoming voice traffic.
Through the innovative IMS system, countries can raise money to improve education and health, reduce poverty, and provide for infrastructure in their countries—without increasing their foreign debt or becoming too reliant on development funds. With the available funds dwindling year by year, it would be prudent for these countries to demonstrate a modicum of independence and wean themselves off external funding.