ACMA cuts tax for satellite sector

Satellite sector wins long-awaited tax reductions from ACMA Australia's satellite sector has received a significant boost, with the Australian Communications and Media Authority following through with its proposals to reduce taxes on satellite services in the Ka band as well as providing a tax incentive for earth station spectrum sharing. It has also responded to industry concerns; it will no longer proceed with plans for a tax premium on non-geostationary orbit services and make no changes to current arrangements for CDMA space licences.

The ACMA had first proposed the new taxation arrangements in a consultation paper last year in response to industry concerns that taxes were high compared to international standards. The regulator had commissioned Plum Consulting to review the taxes using opportunity cost pricing principles.

Under the new arrangements that will apply after 5 April 2017, annual taxes for satellite services in the 17.3–51.4GHz frequency range will be as follows: * 30% tax reductions for Australia-wide and high density area licences * 50% tax reductions for medium density area and low density area licences * 100% tax reductions for remote density area licences (subject to the minimum annual tax of A$39.57)

 The ACMA said that the new tax arrangements were likely to add to the more than A$4 billion of GDP already derived from Australian space operations. However, it also resisted industry submissions arguing for larger reductions for licences in HDAs and Australia-wide licences.

In its response to the submissions, the ACMA noted that parts of the spectrum were being considered for 5G services by the International Telecommunication Union. As a result it believes that more moderate tax reductions are necessary as it assesses any relationships between 5G spectrum demand and satellite services in the Ka band. - CommsDay