No plans to reverse tax increase on mobile subscriptions — Sleit

AMMAN — The government on Monday said it is no longer looking into alternatives to rescind a decision that increased taxes on mobile subscriptions, which telecom companies say has caused a drop in their profits and revenues.

“Proposals that were suggested by the telecom operators as alternatives to go back on increasing the special mobile tax are not on the table for discussion,” ICT Minister Azzam Sleit told reporters.

When the government raised taxes on mobile phone subscriptions from 12 per cent to 24 per cent last year, telecos suggested alternatives to generate revenues.

The Kingdom’s three operators — Zain Jordan, Orange Jordan and Umniah — proposed increasing roaming fees as well as charges for international call termination, saying this would generate revenues for the government while at the same time not affect companies or users in Jordan.

A source in the telecom sector said that the companies’ revenues dropped by an average of 7 per cent during the first quarter of 2014 due to the tax increase, adding that net profits have also declined.

But Sleit said the drop is no cause for worry.

“Yes. There is a drop in telecom operators’ profits in Jordan. But this is OK because there is drop in telecos’ profits everywhere in the world.”

He added that telecos in Jordan are still making higher profits than telecom operators in other countries.

Stressing the importance of the ICT sector to the country’s economy, Sleit said the government does not view the telecom sector as a source of revenue but rather as a main player in the field of development.

He called on telecos to enhance their services in the Kingdom.