It would lower the growth of credits and deposits; Ecuador’s banking analyzes scenarios

Ecuadornews:

Around 4.1 million people in the country, who represent around 35% of the market, do not have a mobile network or are not connected to broadband services. The operators see that this niche still has a wide field of development, as well as investment opportunities, according to the report Reform to the Tax System of the Mobile Sector in Ecuador.

The document published by GSMA, an association of more than 800 mobile phone operators and Internet accesses worldwide, shows that smartphone penetration in Ecuador is 49%, while the average in Latin America is 66%.

The figures are due to barriers such as accessibility due to the high tax burdens that operators and citizens assume; the difficulties for the deployment of infrastructure; the lack of aptitude to handle the mobile devices and the low interest in the user when not finding local content that motivates its access.

In Ecuador mobile market revenues represent 2% of GDP, tax payments and sector fees accounted for almost 4.9% of total government tax revenue. Operators contribute with 21%, while consumers with 9%. In the report, the GSMA recommends a 50% reduction in recurring payment for the use of the spectrum.

Also,a 50% decrease in the payment for concentration of the market and the elimination of the special consumption tax (ICE) of the advanced mobile service provided to companies. These measures would lead to a reduction in operators’costs for users, the attraction of investments and an increase in tax collection, the study indicates.

The Minister of Telecommunications, Santiago León, in several spaces has spoken about the need to review tax burdens, which allow all sectors of the population to have access to a mobile phone with Internet access and thus favor digital inclusion. (I)

Source: https://www.eluniverso.com/noticias/2018/12/04/nota/7081779/bajaria-crecimiento-creditos-depositos