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Gov’t ‘still studying’ impact of mobile subscription tax

By Mohammad Ghazal - Jan 29,2014 - Last updated at Jan 29,2014

AMMAN — The government on Wednesday said it was still studying the impact of doubling the tax on mobile subscriptions, while a source in the telecom industry said the authorities are expected to reduce the tax.

The government has not taken any decision yet on whether to lower the tax on mobile subscriptions, which was increased from 12 to 24 per cent last year, ICT Minister Azzam Sleit told The Jordan Times.

“We are still studying the impact of increasing the tax on prepaid and post-paid mobile subscriptions… the study is still being discussed by the Economic Development Committee at the Cabinet,” the minister said.

Late last year, Sleit said a specialised government committee was studying the impact of increasing mobile taxes on customers and the sector.

The committee was formed to look into the impact of the decision on the public as well as the revenues of telecom operators, and to come up with solutions to reach a balance that is acceptable to all.

The government is only studying the impact of increasing taxes on mobile subscriptions and is not looking into the impact of raising taxes on mobile phones from 8 per cent to 16 per cent, Sleit added.

A source in the telecom industry, who preferred anonymity, said they held “fruitful discussions” with the government, which was expected to slightly reduce the tax on mobile subscriptions.

Several telecom experts, as well as the country’s three operators — Zain Jordan, Orange Jordan and Umniah — have repeatedly called on the government to rescind the decision, saying it negatively affected their revenues.

The telecom sector’s revenues have dropped by 9 per cent since the government increased taxes on cellular phones and mobile subscriptions last July, according to Umniah CEO Ihab Hinnawi.

In remarks on Sunday, Hinnawi said a study conducted by the three mobile operators showed that profits also declined by between 30 per cent and 40 per cent.

In Jordan, mobile penetration reached 155 per cent by the end of September last year, with 10.227 million subscriptions, according to official figures.

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