taxes


The draft National Digital Policy proposes a target of 70% of internet users by 2025, an undeniably ambitious target. The target – pulled out of thin air as though it may seem – is actually based on a time series forecast using ITU statistics from 2000-2017. The forecast was computed using a statistical software called Tableau, which considers exponential smoothing and seasonality. The lower and upper levels were based on 95% confidence intervals. The chart below shows that the upper limit that can be achieved is 74% by 2025 if accelerated efforts are made to drive internet adoption and smartphone use in Sri Lanka.
Yesterday, I was the only non-politician on a political debate show on TV known as “Satana” (battle). The topic was the new President’s/government’s 100 Day Program (of which more than one-third has passed). I was not expecting to talk about the taxes imposed on the mobile industry, but right in the middle, one of the “referees” asked me about one of the three (or two, depending on the company size) taxes imposed on the mobile operators. I briefly answered saying it was not a good idea since its retroactive and mobile-specific nature was likely to have the effect of depressing investment that was needed if Sri Lanka is to move to the next stage of connectivity beyond voice. I had taken this position without any serious pushback in other media since shortly after the interim budget was announced.
To many people’s surprise, the UK has decided to tax every fixed line 6 pounds a year to build “next generation broadband” throughout the country. But Virgin’s network is limited and fibre-optic cables are expensive. The two firms can profitably reach only around two-thirds of the population, reckons Matt Yardley of Analysys Mason, a consultancy that helped to prepare the report. Connecting the rest at high speed will cost around £3 billion. So Lord Carter surprised the broadband industry by proposing a £6 annual tax on telephone lines, raising around £150m.
Government has released the 2008 second quarter economic performance data, which shows, again, that the telecom sector is growing the fastest, at 23.2 per cent (as against 21 per cent, 2007 Q2), followed by mining and quarrying at 19.6 per cent. In his weekly newspaper column in the Lankadeepa, Mr Udaya Gammanpila, the Chairman of the Central Environmental Authority and the main proponent of mobile-specific taxes, has posed the question to me why the mobile sector keeps growing even as they keep loading taxes on it.   For example, the mobile subscriber levy of 10 percent of every bill was in effect in 2008 Q2.
I had the opportunity of chairing a panel of seven persons from various parts of Asia at the Forum at ITU Telecom Asia 2008 in Bangkok.  After we got around the inane title of Manga for the masses, we had a decent discussion, focussing on the aspects of connecting the unconnected, assuring adequate quality to the connected, and content.   My overview slides setting the frame are here. Contrary to expectation, the Chairman of the Bangladesh Telecom Regulatory Commission, representing perhaps one of the least connected of the countries of Asia, talked about using universal service funds to develop content.   Several people referred to the counter-productive nature of universal service taxes, wherein poor people were being taxed to provide services to poor people, yet those taxes were not being utilized, wisely or otherwise.