Thailand May Cut Excise Taxes For Telecom Services

[Jai Dee]

Thailand may cut excise taxes for telecom services

Excise taxes for Thailand's telecommunications services could be scrapped as part of a sweeping plan to overhaul the industry, according to sources.

Moves to introduce an interconnection regime, meanwhile, have come to a halt as state-owned TOT has refused to open negotiations with mobile operators due to concerns about lost revenues from current access charges paid by mobile operators to reach fixed-line networks.

M.R. Pridiyathorn Devakula, the finance minister and deputy premier, signaled that a comprehensive telecom reform plan would move forward next month, covering issues including interconnection rates, access charges and excise tax payments.

In 2003, the government imposed excise taxes on telecom services, ostensibly to divert greater revenues from state concessions to the government, rather than to TOT or CAT Telecom.

Sources said that under the new government, the excise tax could be scrapped altogether to pave the way for the state enterprises, particularly TOT, to accept compromises in access charges and interconnection.

TOT has refused to negotiate interconnection rates with DTAC or True and has threatened legal action if either operator declines to pay access charges.

One executive said a move to scrap the excise tax could help ease TOT's concerns over lost revenues from the launch of interconnection rates and the adoption of equal-treatment terms for all operators.

Under interconnection, calling charges would be split between the originating and receiving network operators, as well as any intermediaries. The National Telecommunications Commission (NTC) says interconnection is a key element of industry reform, and will allow future operators to utilize existing networks under a clear compensation scheme.

Source: telecomasia - 28 November 2006