Taxation of the telecommunication sector in developing countries

The thesis by Faycal Sawadogo entitled "Taxation of the telecommunication sector in developing countries" is currently in progress under the direction of Professor Rota-Graziosi, Director of CERDI and Co-Head of the Taxation Program at FERDI. This thesis deals with the different interactions between the agents involved in a telecommunication license.

Active • November 01, 2018 > December 30, 2021

The first part evaluates the tax burden on telecommunication companies in 10 African countries and makes a cross-sectoral comparison of this tax burden. The results reveal an average effective tax rate (AETR) ranging from 35% in Morocco to 118% in Niger, with specific taxation accounting for more than half of this tax burden. Moreover, the tax burden on telecommunications companies is higher than that on mining companies or companies operating in sectors without specific taxation. Empirical studies show that corporate income tax and particular taxes on telecommunications companies in the countries studied harm their investments. Concentration also has an adverse effect on investment. GSMA is supporting this study, and discussions are ongoing for further collaboration.

The second part studies the tax incidence of excise duties on telecommunications services prices in WAEMU countries. Several studies have shown that this tax incidence is higher with a specific tax than with an ad valorem tax. This section will test this hypothesis for the price of telecommunications services measured here by the consumer price index of the communications function.

The third part deals with the evolution of the adoption of telecommunication services throughout the world. All countries, both developed and developing are considered to make a comparative analysis of the different coefficients determining the levels of adoption of these services. According to the theory of innovation adoption, the evolution of a new technology in a population follows an S-curve the parameters of which depend on several factors specific to that population. The question will then be for each country to determine these parameters, to test this theory on telecommunications services and the determining factors by evaluating the role of taxation.

Partners

  • Centre d'études et de recherches sur le développement international (CERDI)