Handset manufacturers on alert over proposed phone tax

Handset manufacturers on alert over proposed phone tax


Handset manufacturers are on alert after it emerged that the European Union
is considering placing an import tax on mobile phones with built-in GPS and TV.


Sources estimate the move could increase the cost of handsets by up to 25% – at a time when the industry is already addled by the current economic crisis.


Mobile phones are duty free under the 1996 Information Technology Agreement. The EU is now in the process of deciding if handsets with additional features (such as GPS, radio, television or cameras) should be classed within the same agreement.


One source at a top handset manufacturer said: ‘There would be huge ramifications. I think people would have to look into EU production.’


One source at another leading manufacturer added: ‘It will be interesting to see
if they can get away with this. On one hand they are trying to reduce roaming rates and then they are thinking of whacking an import tax on handsets.’


Analysts said the move could impact heavily on operators as well as handset manufacturers. One analyst said the idea ‘is not good news’. He added: ‘There
are not many operators that can increase subsidies at the moment.’


The European Commission said mobile devices with the extra features would be more appropriately referred to as ‘apparatus with multiple functions, including mobile telephony’ as they are ‘more than just mobile phones’.


The European Commission added that discussions are ‘ongoing’ and it has not made a formal decision as of yet. ‘The Commission will take the arguments of all stakeholders (including the industry) into account before taking any decision,’ it said.


It is thought that the tax on GPS-enabled devices is due to increasing pressure from European handset manufacturers in Germany and the Netherlands.


The import tax is heavily opposed by the European Information and Communications Technology Association, supported by companies such as Apple, Sony Ericsson, Motorola and LG Electronics.




Features that could be taxed



  Personal digital assistant






Written by Mobile Today
Mobile Today


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