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EU scraps plan to tax phones with GPS, TV

updated 12:20 pm EDT, Thu July 2, 2009

EU gives up on phone taxes

In some good news for local cell phone manufacturers, the European Union's plan to introduce new taxes for handsets sold throughout Europe has been scrapped, says a Wednesday report. The new taxes would have raised prices customers pay for new phones and most likely lowered the sales numbers of an already falling market. The decision came from Sweden, which hosts the rotating presidency of the EU, and will mean the Customs Code Committee will continue to treat cell phones as duty-free items.

The proposed tax plan, presented in December, had smartphones reclassified as "multi-functional devices," which would add a 14 percent tax to handsets with TV receivers and 3.7 percent to those equipped with GPS capabilities. As expected, phone manufactures opposed the tax, with local phone giants Nokia and Sony-Ericsson especially vocal on the issue. Companies like Apple would have been affected as all iPhone 3G and 3GS phones have built-in GPS receivers.

The taxes and resulting drop in sales would supposedly put workers at risk in Europe, as many handset makers operate manufacturing plants in countries that include Britain, Finland, Hungary, Romania and Estonia.

by MacNN Staff



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