Spain Relaxes Tax Law

date: September 24, 2001

The Spanish government approved a 62.5 percent reduction of a controversial radio spectrum tax on 3G mobile phone operators.

The lower tax rate will take effect next year, reducing the total amount to be raised to 360.6 million euros from 962 million euros due this year.

The bulk of the total tax is made up of charges on 3G license holders, of which there are four in Spain including the wireless arm of Telefonica , Telefonica Moviles and a unit of Vodafone .

The Spanish government is charging a UMTS tax even though the 3G service is not on line yet.

Moviles, Airtel-Vodafone, Amena and the Xfera consortium all own 3G licenses and had lobbied intensely for the government to ease what was seen as a steep tax.

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