0 Theme: Network Tariffs and Choice Author: September 22, 2015

The Wallonia Digital Council advocates the elimination of taxes on GSM pylons and antennae

On Friday 18 September, the Wallonia Digital Council submitted its conclusions to Minister Marcourt in a report – “Digital Wallonia. Digital Plan Proposal“. It will be remembered that the Council’s task is to define specific courses of action to be undertaken in connection with digital strategy to make Wallonia one of the foremost ‘digitalised’ regions. BASE Company fully supports this initiative. One of the Council’s recommendations is to eliminate taxes on GSM pylons and antennae.

A tax logic that is totally at odds with the ambition of Wallonia

It will come as no surprise to learn that BASE Company welcomes the Digital Council’s recommendations, and most especially measures striving to implement an ambitious project to deploy fixed and mobile ultrabroadband in Wallonia, the simplification of regulations and administration to speed up deployment of networks, and the elimination of taxes on GSM pylons and antennae (regional, communal and provincial taxation). These taxes could now total over 50 million euros per year in Wallonia for the country’s three mobile operators, a substantial amount that could be allocated to a fourth 4G network in the region!

It should be remembered that BASE Company has constantly called for the general elimination of these taxes, which affect its investment strategy directly at source, and even more so in less densely populated areas, and has in fact declared it would be willing, if the authorities were amenable, to invest these amounts in its Walloon network. Let us be clear about this: BASE Company wishes to invest, but there must be a proper regulatory context!

In recent months, BASE Company has become aware of a certain amount of convergence of opinions among leading representatives of Wallonia’s digital ecosystem in favour of eliminating these taxes:

–          In a survey commissioned by Minister Marcourt as a basis for the work of the Digital Council, consultancy firm, Roland Berger, had already singled out elimination of these taxes as one of its 71 recommendations to boost the digital sector in Wallonia, since the firm considered it a genuine obstacle to investment in infrastructure.

–          Only recently the Director-General of the Digital Agency, Benoît Hucq, explained in Trends Tendances that these taxes put the brakes on investment by operators.

The same sources claim that Wallonia is dragging its feet slightly in terms of development of the digital economy with respect to other regions. And so far, it is the only region that taxes the digital economy…

The Digital Council has now confirmed that this taxation logic is no longer tenable.

The 2014 regional tax will not produce a single cent: either for the Region or the communes

One non-negligible factor in the debate is that case law also continues to favour operators.

Tax payments in the communes have been systematically challenged by operators, most of which have won their appeals in courts and tribunals. Perversely, this has led to budget insecurity in the communes. Moreover, this was what the Wallonia Region wished to rectify by applying a regional tax as from 2014 on GSM pylons and antennae with a system of supplements for the communes to boost local budgets.

No such luck. On 16 July, the Constitutional Court decided to abolish this tax on the grounds that the Wallonia Region had overstepped its competences by interfering with the fiscal autonomy of the municipalities (competence of the federal government). The Court ruling, however, maintained the effects of the regulations abolished.

Ironically, however, the Region will not secure the amounts concerned either. If the effect of the regulations concerned is to be maintained, they must have had an effect, which is not the case here… On 14 July, just two days before the Court issued its ruling, the Walloon administration cancelled enrolment of the disputed taxes for the year 2014 on the grounds of irregular taxation procedures. This means that the sector now owes the Walloon administration nothing at all in respect of 2014!

It should be noted that in June, the mobile sector submitted a similar appeal to the Constitutional Court against the decree introducing the same tax for 2015.

Does EU case law also favour operators?

In proceedings between BASE Company and Mons Town Hall concerning a tax levied by the latter on GSM antennae, the Mons Appeals Court decided to refer the case to the Court of Justice of the European Union to enquire about the compatibility of the tax with EU legislation (Article 13 of the Authorisation Directive). The Advocate-General submitted an opinion on this issue in July which cast doubts on the legality of the tax pursuant to the directive, as it is simply a flat rate. The Court is due to hand down a ruling within the next few months.

Will the Walloon Government abandon its tax logic?

The decision by the Walloon Government remains to be seen: will it attempt to reintroduce a tax format or, as BASE Company hopes, will it follow suit behind the Digital Council and opt for a ‘pro-investment’ logic.

 

A link to the report of the Digital Council can be found here:https://www.digitalwallonia.be/plandunumerique/

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