Sales tax and its impact on the profitability of telecommunications companies using price elasticity of demand

Abstract

The aim of this research is to investigating the accuracy of the opinions and academic theory, which adopts the point of view which said, the sales taxation can be used to change the consumption behavior for the individuals. Also, this research including some of investigating about the impact of changing the consumption behavior for the individuals on the income of telecom companies and their profit as a result of the imposition of sales taxation on mobile services in Iraq,

Therefore, the objective of this research is to study the effect of sales tax on telecommunications services which impact on their incomes and profit.

The most important conclusion of this reached shown that “accept the hypothesis of research where the sales tax has a clear impact on both incomes and profit as a result this will lead to reducing the amount of income tax which imposed on those companies.

Finally, the researcher has a number of recommendations, the most important one is to review the percentage of sales tax on mobile services in order to reduce them, as a resulting in the harmful effects of income, profit and profitability of the telecommunications companies being a full flexible services, in order to reduce the negative impact on the amount of income tax which paid by telecom companies to the Public Treasury”.