Spain is to cut 3G tax

date: May 14, 2001

The Spanish government is to lower tax on the use of 3G radio frequencies to reflect the current slump at the telecom market.

In an interview Ana Birules, telecommunication minister said in the next year budget, taxes for the 3G radio frequencies would come down. The cut is to reflect the current poor situation in the telecom market with shares collapsing and the uncertainly of the technology.

Spain raised only $477million from the 3G licenses sold compare with German ($37 billion) and UK ($22billion). To avoid critics, the government set aside a tax fee on each of the licenses.

The four winners (Telefonica Spain, Airtel, Amena, XFERA) have refused to pay and are preparing a legal challenge against the Spanish government in an European court.

By lowering the tax rate, the government is hoping to avoid the law suite and to reflect the current market value.

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