The High Cost of Taxing Telecom
18 Pages Posted: 1 Sep 2008
Date Written: September 1999
The emergence of competition in the telecommunications sector, combined with the convergence of previously separate telecommunications technologies - cable, telephone, satellite, wireless - into a single marketplace have made the current telecommunications tax regime unworkable and created an urgent need for telecommunications tax reform. Each of these different industry sectors is subject to its own tax regime, meaning that the same service can be subject to very different tax treatment depending on the type of firm that offers it, and efforts to eliminate such consistencies are hampered by the extreme complexity of the system.
This paper describes the current regime and presents very preliminary findings about the impact of current policies in terms of both economic efficiency and fairness. It concludes with a brief discussion of potential policy implications.
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