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.