Vodafone Chief Slams Australian Telecommunications Taxes

by Mary Swire, Tax-News.com, Hong Kong

11 October 2001

The lot of a Vodafone executive is not a happy one. Just days after the Chairman of the Vodafone Group's Spanish arm, Airtel, spoke out against the tax cuts hastily implemented by the Spanish government, claiming that they were insufficient given the 'excessively high' valuation of the Spanish spectrum, the Group's global chief executive has slammed the Australian federal government, saying that despite the $2.7 billion invested in Australia, shareholders had yet to see a single dollar in returns.

Speaking at a Business Council of Australia meeting in Sydney earlier this week, Julian Horn-Smith criticised the punitive regulatory and tax levies on telecommunications carriers in Australia. He revealed that in addition to normal business taxes, over a quarter of Vodafone's investment in the country had gone to the government in the form of sectoral regulation fees, and that the amount being paid in these fees by telecoms companies had risen by an average of 57% per year.

Mr Horn-Smith said that he feared that high taxation and regulatory costs could have a serious effect on the future of the industry in Australia: 'The early diversion of investor funds into government coffers will slow the development of the industry,' he warned. However, he denied rumours that like several other Australian based business recently, Vodafone Australia was planning to relocate as a result, saying that any director who suggested such a thing would be 'laughed out of the boardroom'.

However, he did suggest that several of the industry-specific brakes on productivity and profit should be removed in order to satisfy the disgruntled sector: 'Telecommunications should be treated like other competitive industries,' he concluded.

Recommended