High Court rules certain broadcasters subject to telecoms development tax

Tristan Gilbertson (Commissioner of Telecommunications)

Credit: provided

The High Court clarified that it is not only telecommunications operators who are subject to the Telecommunications Development Levy (TDL), but also broadcasters.

A court ruling late last week clarified that companies involved in the transmission of broadcast signals should be required to contribute to the TDL.

The Commerce Commission has sought clarification from the High Court after amendments to the Telecommunications Act in 2018 removed an exemption for ‘broadcasting’ from the definition of ‘telecommunications’. Other parties involved in the case were Kordia, Sky TV, TVNZ, Optus and Chorus, as intervenor.

Telecoms Commissioner Tristan Gilbertson said the commission should determine the amount of TDL paid by industry players under a statutory framework of the law around December each year and welcomed the clarity provided by the judgment. .

“It was important for us to be able to decide on the liability of the TDL knowing clearly whether any of the broadcasters are liable as a result of changes to the telecommunications law,” he said.

The judgment confirmed that with the exception of free-to-air broadcasters and satellite providers operating outside New Zealand, companies involved in broadcast transmission may be liable to pay TDL.

The TDL was created by law in 2011 and specified that the amount telecom providers must contribute would be reduced from $50 million to $10 million per year in 2020.

“The judgment will make no difference to the total funds raised by the tax, which is set at $10 million per year, but it will affect the contributions paid by individual companies, which are proportional to their income from telecommunications services. “, Gilbertson mentioned.

“We will now use the advice provided by the High Court to move forward and make our TDL decision for 2021/22.”

Last year, Spark, Vodafone, Chorus and 2degrees collectively paid around 90% of the tax.

The fee is paid by businesses that earn more than $10 million a year from telecommunications services. It is used to pay for telecommunications infrastructure and services that are not commercially viable, including relay service for the deaf and hard of hearing, broadband for rural areas, and improvements to the 111 emergency service.

The levy has been set at $10 million for the year 2019/20 and is adjusted for inflation for subsequent years

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