Reduce the taxes on cell phones

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Cellphones_5 The recent issue of the Economist continues their coverage of the importance of cellular phones for development (which we have highlighted before).

“Imagine a magical device that could boost entrepreneurship and economic activity, provide an alternative to bad roads and unreliable postal services, widen farmers' access to markets, and allow swift and secure transfers of money. Now stop imagining: the device in question is the mobile phone.”

Up until recently the high cost of headsets had been the main constraint to increased use. However, the recent efforts of manufacturers to produce (and donate) low cost yet reliable headsets must be commended. Unfortunately, governments are not doing their part:

“Rather than treating mobile phones as an important tool for development, many governments see them instead as an opportunity to impose hefty taxes and milk a fast-growing industry for all it is worth. In both Turkey and Bangladesh, for example, anyone buying a new mobile phone must pay a $15 connection tax. Many
countries slap large import duties on handsets and impose special taxes on subscribers and operators. In many cases, these taxes double the cost of acquiring a mobile phone.”

In order for the development potential of cell phones to be maximized governments need to start reducing these burdensome taxes. Here is some additional background from the Economist and more on the recent technological progress via Wired.

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