Spanish Vodafone Operators Call For Higher Tax Cuts

by Ulrika Lomas, Tax-News.com, Brussels

10 October 2001

The Spanish government raised a tax on 3G mobile operators this year to compensate for receiving the disappointing sum of 500 million euros at its UMTS (Universal Mobile Telecommunications System) licence auction, compared with more than 50 billion euros raised in Germany during its auction. But it gave in to pressure from mobile operators based in Spain who threatened to embroil the government in legal action and lowered the tax rate.

Due to take effect from next year, the government announced last month that the tax will be reduced by 62.5% resulting in the government reeling in just euros 360.6 million compared to the euros 962 million that it could have collected if it had allowed the tax rate to stand. However, Airtel, Vodafone's Spanish arm, has spoken out against the government's decision to reduce the tax by complaining that the tax cut was not enough.

'The latest UMTS licences in Greece and Denmark indicate that the Spanish spectrum is still valued excessively high,' Jose Manuel Entrecanales, chairman of Vodafone Airtel, told reporters.

Recommended