Cellphone operators furious at possible antenna tax

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City halls are demanding that cellphone companies pay a local tax for every antenna, which will amount up to EUR 270 million.

25 April 2008

MADRID - Faced with shrinking tax revenues due to the end of Spain's decade-long property boom, town and city halls across the country are setting their sights on cellphone operators as the next cash cow.

More than 350 city halls - including those of Madrid, Barcelona and Seville - are demanding that Spain's three leading cellphone companies pay a local tax for each antenna they have installed in the area, including those on private buildings.

The quarterly tax would amount to around 1.5 percent of the companies' revenue in relation to coverage area, number of clients and average earnings per client and could bring in as much as EUR 270 million per year.

The three cellphone operators - Telefónica, Movistar and Orange - are furious. According to an industry spokesperson, none have paid the tax to any city hall as they prepare a lawsuit.

The companies claim that the law breaches an agreement reached with municipalities in 2002 under which they were subject to higher business taxes and which has already cost them an additional EUR 80 million per year.

They say that if they are forced to pay the new local antenna tax they will have no choice but to raise tariffs for customers by 2 percent on average.

[El Pais / Ramon Munoz / Expatica]

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