Ecuador cuts tax burden on mobile operators

Ecuador cuts tax burden on mobile operators

The Ecuadorian government announced that the special consumption tax (ICE) for mobile phone services is scrapped in the country.

The Impuesto a los Consumos Especiales (ICE) will no longer be applied to fixed voice and mobile phone services with effect from 1 December, following the entry into force of the new Economic Development Law, said the government.

For mobile phone services, it was charged on postpaid plans with voice and those that offered a combination of voice, data, and SMS. The tax rate was 10% for individuals and 15% for companies.

International trade groups such as the GSMA and the Inter-American Association of Telecommunications Companies (Asociacion Interamericana de Empresas de Telecomunicaciones [ASIET]) had been lobbying the country’s new president Guillermo Lasso, who took office in May this year, to scrap the monthly levy as a means to reduce the tax burden on telecoms companies and encourage service expansion, especially in rural areas.

According to BNamericas, the telecommunications sector in Ecuador is subject to a high tax burden. The telecom minister Vianna Maino said in a recent interview that the sector's market share tax, where operators with larger market share pay a higher tax rate, was a major obstacle for expansion plans and investments.

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