Brazilian Government to Reduce Machine-to-Machine Taxation

A decision announced by Brazil’s Communications Minister Paulo Bernardo and signed by President Dilma Rousseff, will significantly reduce the SIM card tax on M2M devices.

It will provide a stimulus for operators to develop services, such as smart metering, car tracking, or remote health monitoring.

Mobile industry association GSMA welcomes the Brazilian government’s decision to pass regulation reducing taxation on machine-to-machine (M2M) devices.

“President Rouseuff’s decision to reduce this taxation is a significant move to stimulate the growth of M2M services and should be recognised by other markets as a very positive and forward-looking move,” said Tom Phillips, chief regulatory officer, GSMA.

“M2M is a new market whose growth should be encouraged by government policies of low taxation and light-touch regulation. Countries like Brazil that encourage the growth of M2M services will be the first to benefit from the social, environmental and economic opportunities of this important new sector.”

The decree will cut two fees in the Telecommunications Inspection Fund (FISTEL) – the Installation Inspection Tax (TFI), which is charged when a SIM is first activated and the Operation Inspection Fee (TFF), an annual charge on each active SIM. This equates to a combined reduction of 80 per cent.

According to GSMA, there are approximately 8.7 million M2M connections currently active in Brazil, a figure that is expected to grow exponentially following this decision.

The GSMA recently released a report called ‘The Mobile Economy Latin America’ that predicted 84 million M2M connections by 2017.

The GSMA Latin America will host a three-day Plenary in Montevideo, Uruguay on May 27-29 inviting key government and mobile industry representatives from across Latin America to discuss the industry, including a seminar on M2M service models (“Connected Living”, 27th May).