President Dilma Rousseff has signed a decree relieving taxes on smartphones, with a waiver of up to R$ 500 million a year. The exemption should lead to a reduction of up to 30% in the final consumer price of imported smartphones. Under the terms of the Decree, smartphones with high speed Internet and pricesof up to R$ 1,500, will be entitled to tax relief.

According to Communications Minister, Paulo Bernardo, the tax relief for smartphones forms part of a cycle of incentives given to the telecommunications sector with the main objective of benefiting the end user of the service. "We are always aiming for better customer service, acting with public policies to improve people's access to the Internet. Our goal is the consumer." Bernardo also mentionedthe previous tax relief measures for modems and tablets and the National Broadband Program Special Taxation that abolished taxes on investments in the construction and modernization of fiber optic networks.

The Decree states that an act from the Ministry of Communications is to define the technical specifications that a cell phone must have to be considered a smartphone with high speed Internet and thereby benefit from the tax cut.

The technical features which need to be present on the cell phone include wi-fi, a browser application, a mail application, an operating system with a third-party developer kit, a screen area greater than or equal to 18 cm2, and applications developed in the country, including by third parties.

One of the expected benefits of the tax relief is to stimulate the availability of 4G devices in the Brazilian standard, as a result of an auction held in June 2012. Today there are only three 4G models in the Brazilian market. Today around 27% of all cell phones sold in Brazil are smartphones and this figure is expected to reach 50% of the total in 2014, or around 30 million devices.

Source:

Ministry of Communications

13 April 2013