The Estonian Association of Information Technology and Telecommunications (ITL) considers the plan to introduce a new special fee for telecommunications companies, with which it is planned to finance the increase in the number of officials in one area of the Consumer Protection and Technical Regulatory Authority (TTJA) by almost half, to be unjustified and harmful to the country’s economy.
The development intent of the bill of amendments to the Electronic Communications Act seeks to establish a turnover-based fee for communications companies, one of the main purposes of which is to collect additional funds for TTJA in order to hire an additional 12 officials in addition to the existing 27 officials involved in the coordination of the communications field. According to the draft, this fee would be applied to communication companies with an annual turnover of communication services exceeding 500,000 euros at a rate of 0.2 percent of the turnover of communication services of the previous financial year. There are about 20 such companies in Estonia today.
“At a time when the state has publicly promised to focus on cutting public sector costs and reducing bureaucracy, and the corresponding promises are also outlined in the coalition agreement, an astonishing plan has been prepared to increase the number of TTJA officials working in the field of communications by 44 percent. ITL calls on the government to implement the new coalition agreement and stop all activities that increase bureaucracy, the administrative burden of companies, the state’s cost base and the number of officials in Estonia,” Doris Põld, CEO of the association, said.
ITL is of the opinion that ministries and agencies should avoid all activities and initiatives that increase the burden on entrepreneurs and the volume of public sector expenses, as well as the duplication of activities with other state institutions.
According to the CEO, burdening companies with additional lurking taxes or fees in addition to the already imposed corporate income tax and other tax increases is not justified.
“The competitiveness of Estonian companies is affected negatively by the bad practice of creating new taxes as needed. The ability to change these taxes if desired does not add to the feeling of security. In addition, we would like to remind that communication companies already pay very large taxes to the state budget and, in addition, special fees amounting to millions, such as frequency and numbering state fees and auction fees,” she added.
ITL board member Toomas Polli said that in 2023 alone, companies in the communications sector paid more than 1.78 million euros in state fees for frequency licenses and 2.73 million euros in state fees for numbering authorization operations.
“Therefore, companies paid a total of 4.51 million euros in state fees in these categories alone last year. At the same time, it should be taken into account that from July of this year, the size of the state fees for frequency licenses was increased by an average of 23 percent, which means that already for the current year, the corresponding revenue in the state budget will increase significantly. If we add the fees from the frequency auctions, the state was paid a total of more than 28 million euros for the various frequency licenses necessary for the provision of 5G,” Polli added.
According to Põld, it is due to the above that even today the telecom sector is paying significantly more to the state budget in the form of state fees and various special fees than it takes to perform supervision.
“The state actually already has the money to finance the activities of the TTJA and at the moment they are just looking for reasons to introduce a new tax. It must be taken into account that all new fees and taxes increase the input costs of entrepreneurs — it is not fair to say that this is not the case,” Põld said.
According to ITL, the additional work of TTJA mentioned in the justifications of the bill does not in any way support the improvement of the availability of communication services for citizens and companies, but is an additional burden on communication companies.
“The state does not intend to use the money from the new fee for substantive investments, but to increase the state budget expenses. The question arises whether the principles of efficiency and optimality and the need to reduce bureaucracy have been taken into account when preparing such a plan,” Põld said.
ITL calls on the government to implement the new coalition agreement and stop all activities that increase the bureaucracy, the administrative burden of companies, the state’s cost base and the number of officials in Estonia.
Source: BNS
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