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7.3Reduce taxes and import duties ontelecommunicationICT equipment and servicesImposing new or raising existingtaxes on ICT services andequipment may be counterproductiveand can impactbroadband deployment andadoption adversely. There issignificant evidence to suggestthat reducing taxes and importduties on telecommunication/ICT equipment and servicescould significantly boost levelsof ICT uptake. Tax incentivescan also be given by countrieswith low broadband penetration(such as double depreciation).For example, in 2007, Colombiareduced its VAT rate from 16%to zero for the majority of PCs(both desktops and laptops) tofoster consumer demand for PCsand spur national productivityand competitiveness. IDC(2013) 1 found that Colombia’sPC tax reduction facilitated:• A 110% increase in PC salesrevenue from 2006-2008—morethan twice the average of fiveother countries in the region.• A 83% tax revenue benefit for2007-2008, due to increasednew PC purchases andcomplementary hardware,software, and Internetservice purchases.• A 466% growth in Internet usefrom 2005-2008 (compared with161% growth across the region).• Since 2007, PC unit salesin Colombia have continuedto significantly outpace theregional average. Unsurprisingly,Colombia has extended theperiod for its VAT elimination.Chapter 77.4Accelerate investmentin broadband infrastructureThere has been a significantchange in the level and balance ofrevenues between different playersin the broadband ecosystem(OECD, 2013 2 ). Telecommunicationand broadband access providersneed to explore businessarrangements with Internet contentproviders that will accelerateglobal investment in broadbandinfrastructure, to the mutualbenefit of all, including endconsumers.Internet companiesand Internet content providersneed to contribute to investmentin broadband infrastructure bydebating interconnection issuesand agreeing fees/revenue shareswith other operators andbroadband access providers toaccelerate global investment inbroadband infrastructure (includingIXPs, CDNs, data centres, backhaulfibre investments and otherinfrastructure) and by contributingto a healthy broadband ecosystem.At the national level, this maymean authorizing new marketentrants, eliminating red-tape,encouraging closer collaborationbetween the national investmentpromotion agency (IPA) andthe telecom Ministry and/ortelecom regulator, and workingwith potential new or existingoperators to promote investmentsto help achieve national targets.85