High-spec mobile phone prices may increaseEU considers tax on advanced mobile phones

19 December 2008

Android G1 smartphone

The G1 features a 480x320 pixel touchscreen

Mobile phone prices for mobile handsets with high-tech mobile features such as TV receivers, built-in sat-nav, high-quality cameras and full qwerty keyboards may soon be on the increase, according to a report by Reuters.

The report reveals that the European Commission is planning to start taxing a number of high-end mobile phones, following a formal proposal sent to member states last week.

In the proposal, the European Commission outlined plans to reclassify some mobile phones as 'multi-functional devices'. This reclassification of such mobile phones would result in a 14% tax on mobile phones with TV receivers and a 3.7% tax on navigation-enabled phones.

Nokia and Sony Ericsson resist mobile phone tax

The Reuters report goes on to say that mobile manufacturers Nokia and Sony Ericsson , who together make almost every second mobile phone sold in the world, are strongly against the tax on high-tech mobile phones.

Reuters reports that a Nokia spokesperson said that: 'There is a danger that this proposal would put the latest technology out of the reach of European consumers as it would simply push up the price of sophisticated mobile phones. This is in nobody's interest.

'While only a small number of sophisticated mobile phones in the industry would be affected today, due to rapid technological advances, the number ... would likely rise significantly in the coming months and years.'

Mobile price rises caused by mobile tax

Several industry experts expressed concern in the Reuters report that such a tax on mobile phones with advanced features like TV and high quality camera phones could put additional strain on a mobile industry that is already struggling. 

Mobile handset sales in Europe have dropped since the start of 2008 as consumers delay purchases due to the slowing economy. 

One expert estimated that the planned mobile taxes could cause the average price of a navigation-enabled or TV-enabled mobile phone to rise by between 5 euros [about £4.70] and 40 euros [about £37.80] in 2009.

EU reasons for mobile tax plans

According to the Reuters report, the EU Commission said it proposed the mobile taxes in an attempt to unify taxation across the 27-country bloc after Germany and Netherlands said they would introduce similar charges.

The Commission's plan will be discussed next February within the Customs Code Committee, which can also decide on the matter.

Maria Assimakopoulou, spokeswoman for EU Tax Commissioner Laszlo Kovacs, said no decision on the new mobiles taxes was imminent as the Commission is only starting discussions with member states.

'These discussions will not be concluded for at least another 6 months', Assimakopoulou told Reuters.

If you want to buy now to avoid paying higher prices for your next mobile handset, use the Which? guide to mobile phones to choose a mobile phone jam-packed with high-tech features - there are reviews of all the latest mobile handsets from Nokia, Sony Ericsson and Samsung plus detailed looks at the iPhone 3G and T-Mobile's Android G1 mobile phone.


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