Brazil
Press Release

Brazil: Feninfra defends debate on taxation and regulation of big techs for a better market balance

Bnamericas Published: Tuesday, November 29, 2022

This is a machine translation of Feninfra's press release

The federal government and the elected National Congress should prioritize the debate on the regulatory asymmetry between telecommunications companies, such as telephone companies and TV/radio networks, and the so-called “big techs”, including Meta (Facebook, Instagram and WhatsApp), Google, Netflix, Amazon, Telegram and Twitter. The assessment was made by the president of the National Federation of Call Centers, Installation and Maintenance of Telecommunications and IT Networks Infrastructure (Feninfra), Vivien de Mello Suruagy. “Big techs are not subject to the same regulations as the telecommunications sector and have a much lower tax burden. I think the time has passed for Brazil to face this issue, as it has been happening in many countries”, emphasizes the president.

Former Minister Paulo Bernardo of the Lula and Dilma governments defended this November the reduction of taxes on broadband access and a higher taxation of “big techs”. Bernardo is coordinator of the thematic group on Communications for the transition of the elected government.

According to Bernardo, the government should discuss whether there is an imbalance between the charges made on different technology companies. The transition coordinator highlighted that Europe has implemented taxation policies and believes that the same could happen in Brazil. In April this year, the European Union (EU) approved an agreement to tax “big techs”, the technology giants also known as “Over The Tops (OTTs)”.

“We believe that this situation of tax imbalance can no longer persist. A cable TV network or a telephone operator pays heavy taxes and has to develop a complex infrastructure. A streaming company that uses this network is subject to a much more modest tax burden. The result is unequal competition. If the current system were fairer, there would be more competition in the market and customers would benefit from more connectivity” emphasizes Vivien Suruagy.

Likewise, adds Vivien Suruagy, the telecommunications sector is subject to a series of obligations and rules, both from the government and from Anatel, which is no longer the case with “big techs”. “We don't think it's wrong for the sector to have rules, also because serious companies follow them rigorously. What is wrong is a system in which companies arrive from abroad to operate in Brazil without any regulation or obligation to assume commitments with local investments”, points out the president.

Transition

The president of the Federation met in Brasilia last week with the Transition Group (GT) of the telecommunications sector to present claims for the sector, including support for 5G, payroll exemptions, regulatory asymmetry, robbery and theft cable management, pole sharing and digital inclusion.

The WG was represented by the former Minister of Communications, Paulo Bernardo, in addition to the former president of Telebras and former federal deputy, Jorge Bittar; and former executive secretary of MCom César Alvarez.

One topic discussed was the reduction of taxes on telecommunications and the granting of subsidies to make broadband Internet available in the country. According to Federal Deputy Jorge Bittar, an eventual combination of tax reductions and subsidies will be carried out within the rules and budget limitations.

Project

A new bill (PL) presented to the board of directors of the Chamber of Deputies last week proposes that the National Telecommunications Agency (Anatel) will regulate and supervise the operation of digital platforms in Brazil. The PL, authored by deputy João Maia, is inspired by the Digital Markets Act, approved this year in Europe.

The text establishes the creation of the Digital Platforms Inspection Fund (FisDigi), constituted, among other sources, by a fee that would be charged from the large digital platforms operating in Brazil. This fee, according to the proposal, will be equivalent to 2% of the platforms' annual gross operating revenue.

“Congress is entering this discussion and, I believe, should vote on solutions that bring balance to the market and even more investments in telecommunications in the country, such as the implementation of 5G. It is a debate that has to be held so that all sectors and companies fulfill their obligations, but in an equivalent way. This is the only way we will create a business environment that is fair and healthy for all players", highlights the president.

Another important point, according to her, is the generation of jobs and the development of specialized labor in Brazil. “Telecommunications companies generate more than 2.5 million jobs in Brazil and invest in employee training, which is not always the reality of “big techs”. We must give priority to work in Brazil, which needs quality jobs”, concludes Vivien Suruagy.


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