A4AI, a global group advocating cheaper Internet, said this has become necessary to make phones affordable to many people, adding that phones are no longer a luxury.
“Such taxes have been the target of previous successful policy campaigns to reduce taxation on mobile devices. The Covid-19 pandemic shows that internet access is not a luxury but a lifeline and a basic right. Internet-enabling hardware must not all be treated as luxury consumer goods,” A4AI stated. “With the economic disruption of Covid-19, digital growth will be even more important for national economic performance,” the group added.
For this to be effective, the group advised governments to design and monitor policies carefully to make sure that changes in the tax regime translate into lower prices for consumers. “While targeted tax reductions mean lower tax revenue short-term, the increase in digital activity as more people use the internet is likely to drive higher long-term economic growth.