ICT wants tax deduction ended

The Information and Communications Technology Ministry ask the cabinet tomorrow to scrap a resolution passed by the twice-elected Thaksin Shinawatra government that allowed private telecom operators to deduct part of their concession fee for excise tax payments.

ICT Minister Sitthichai Pokai-udom said that he proposed scrapping the cabinet resolution instead of eliminating the excise tax on private telecom operators as had been planned earlier because Advanced Info Service (AIS), in its latest proposal to end the longstanding concession fee dispute, demanded that the government guarantee reduced revenue share payments by AIS to TOT Plc. AIS argued that its revenue share rate already covers the access charge.

Mr Sitthichai said that the ministry needed to assess AIS's claims with caution. In doing so, he said it would be best not to ask the cabinet to approve a uniform concession fee rate and scrap the excise tax as earlier planned.

With old cabinet resolution eliminated, all private telecom operators would have to pay full concession fees to concession owners, either TOT or CAT Telecom.

Under the 2003 resolution passed by Thaksin's cabinet, all private mobile phone operators must pay 10% of concession fees as an excise tax to the government before sharing the remainder with TOT or CAT. But the excise tax was allowed to be deducted from the concession fees.

Likewise, all fixed-line operators pay 2% of concession fees to the government before sharing the remainder with TOT. This has resulted in a reduction in concession revenues for the two state agencies, while they also must pay the excise tax like all other operators.

AIS's latest proposal said the company would accept an increase in concession fee payments to TOT to 25% from 20% for prepaid service, and a reduction payments for postpaid service to 25% from 30%.

But the company also said its offer is only good if the state guarantees AIS reduced revenue sharing rates in the case that its rival operators under CAT's concessions no longer pay access charges.

''This is our last card to the state and we will never change this stand,'' said AIS president Wichien Mektrakarn. ''Otherwise, we will not be able to answer to our investors and analysts.''

From : Source: BangkokPost
By : PLA
Date : Dec 18, 2006

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