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Nokia being discriminated in Brazil

By: , IntoMobile
Friday, March 23rd, 2007 at 1:35 PM

Cellular-News:

Brazil_carnival_1
The president and CEO of Finnish mobile phone maker Nokia, Olli-Pekka Kallasvuo, has complained to Brazil’s President Luiz Inácio Lula da Silva that São Paulo (SP) state is applying unfairly high taxes on its phones produced in Amazonas state, newspaper Valor Econômico reported.

In a meeting with Lula, Kallasvuo and Amazonas state governor Eduardo Braga complained that São Paulo charges 18% state value added tax (ICMS) on mobile phones produced in the duty free area (Zona Franca) of Amazonas state capital Manaus, while other states tax only 7%.

Meanwhile, mobile phones produced in São Paulo have zero taxation, according to Braga. "This is discrimination."

Nokia has invested US$100mn over the last five years in Amazonas state and is the fifth largest employer with 5,000 workers.

Worldwide mobile phone sales reached 991mn units in 2006, a 21.3% increase from 2005. Nokia continued to lead the industry with a 34% market share globally compared to 32.5% the previous year.

Nokia’s rivals, US manufacturer Motorola and Korean company LG, produce mobile phones in São Paulo, the newspaper reported.

Smells like someone forgot to give kick backs, wink wink. I’ve traveled to South America before, I know how powerful a crisp $20 bill is.

About The Author

Stefan Constantinescu

Stefan Constantinescu (@WhatTheBit on Twitter) has loved technology since as far back as he can remember. It started with computers, but in the past few years his passion has turned to mobile devices. As a mobile phone enthusiast who lives and breathes devices that connect to the internet, he knows he is not alone with this radical fascination of all things wireless. He is strongly opinionated and enjoys a good debate so leave comments in his posts and he’ll get back to you! Stefan began blogging as a hobby in the fall of 2006 and joined IntoMobile in the summer of 2007. Later he got a job at Nokia in March 2008, but as of June 2009 he has rejoined the IntoMobile team. He is currently based out of Helsinki, Finland.

  • Bernardo

    Whoa there sir. I know Brazil might be one of the most corrupt countries in the planet, but this is definetely not the issue here. States in Brazil are going in a “tax war” amongst themselves, in hopes of attracting companies and factories to their territory. OPK’s statement shows that he feels Nokia is getting a bad deal because of it.

    If you followed the news about the Nokia Siemens Networks merger, you could see how seriously the “kick-backs” thing are taken inside Nokia.

  • Stefan Constantinescu

    Did not know that. Thanks for the insight.

    I like how Nokia carries the flag for morality and incorruptibility. It shows a lot in a world where executives steal millions upon millions of dollars from within.

    I like how OPK refused his bonus since he was giving the same treatment to his fellow employees.

    That’s class.