The UK Communication Managers Association (CMA) fears that tax
relief, recommended recently by the Broadband Stakeholder Group
(BSG) to encourage the uptake of broadband internet access, will be
rejected by the Government in light of the current economic
situation.
Current economic gloom and the war in Afghanistan make tax
breaks unlikely, in the eyes of CMA Director General David
Harrington: “Tax credit for suppliers and tax relief to consumers
would be very welcome. However, the Treasury will decide on this
and it will have to take the view that short-term pain is worth it
for long-term gain, and I am not sure it will do so.”
Earlier this month, Harrington said it was up to the government
to intervene in order to encourage the broadband market to grow.
"The CMA has long urged the government to seize either the chicken
or the egg in order to let demand grow. The free market cannot
solve this one; it requires intervention."
Harrington suggested that this means either ensuring that Oftel
is “more rigorous” in its policing of the competition in the market
or that the Treasury implements tax incentives for both supplier
and user.
