Thoughts on taxes on mobile services

Posted on March 10, 2017  /  0 Comments

We’ve written a lot about taxes on this site. We’ve even showcased studies that showed optimal revenues for government were not obtained by raising taxes. But the current Finance Minister in Sri Lanka does not appear to hear any of this. But we keep hoping. So here is another nuanced contribution from Gabe Solomons.

More than enough taxes? In fact, removing taxes can be a win-win-win for consumers, industry and governments. When Kenya zero-rated mobile handsets in 2009, sales more than doubled and mobile penetration jumped from 50% to 70% in two years. The government collected a third more in taxes in 2011 than it did in the year before zero-rating handsets. Fewer taxes can actually mean more tax revenues for governments and more roads, school benefits, or government jobs for their citizens.

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