The Finance Ministry and the Information and Communications Technology (ICT) Ministry will propose different telecom excise rates for the Cabinet's consideration next week.

ICT Minister Sitthichai Pookaiyaudom yesterday said he would propose that the rate be zero for both fixed-line and cellular operators, explaining that telecom services were not a luxury item.

The minister said the zero rate was aimed at avoiding burdening telecom operators financially, or else they would likely pass the rising costs on to their customers.

Meanwhile, the Finance Ministry will propose three options: zero, 5 per cent and 10 per cent.

The new telecom excise rates are part of the current government's plan to revoke the telecom excise resolution of the ousted Thaksin Shinawatra government.

This resolution has permitted all private telecom operators to deduct part of their concession fees to be paid as excise directly into the state coffers and the remainder to their concession owners: TOT or CAT Telecom.

Under the telecom excise tax, private cellular concessionaires have paid 10 per cent of their concession fees directly to the government as excise before sharing the remainder with TOT or CAT Telecom.

Fixed-line telephone operators have paid 2 per cent out of their concession fees as excise to the government before giving the rest to TOT.

The practice has prompted a decline in the concession revenues of the state telecom agencies, unlike earlier when they had gained the full concession fees from their private telecom concession holders. TOT and CAT have also paid excise to the government.

The excise is estimated to have cost TOT and CAT a total of Bt23.903 billion and Bt15.249 billion, respectively, between 2003 and 2005.

The ICT Ministry's proposal will once again mandate that all private telecom operators pay the full concession fees to their state concession owners and the new excise rate to the government.

Telecom Reporters

The Nation