Wed | Aug 23, 2017

Universal Service Fund failing to collect millions in call taxes from companies - Auditor General

Published:Wednesday | December 9, 2015 | 12:44 PM

The Universal Service Fund has been found to be delinquent in collecting millions from telecommunications companies who fail to pay over taxes from international phone calls.

The Auditor General’s Department says as at March 2015, $117.8 million was owed to the Fund in universal service levy from carriers.

Jamaica imposes a tax on all inbound international calls that terminate in the country.

The claims were contained in an Auditor General’s Department report which was tabled in parliament yesterday.

 

The department says it noted the debt during an activity-based audit of the Fund which covers the period April 2012 to October 31, 2015.

The Universal Service Fund is mandated to collect the universal service levy.

The department says the Fund has since informed that it has collected $52.5 million of the delinquent amounts reported at March 2015.

However, this leaves $65.3 million outstanding.

The AG’s report notes that the agency has not implemented formal policies and procedures to govern the collection of the tax.

The report says carriers have not been submitting the necessary reports on a timely basis which it notes affects the state agency’s ability to determine the amount of levy to be collected.

The report should provide, among other things, details of the duration and the applicable rates of international voice calls that terminate locally.

It says it found no evidence that the Universal Service Fund took any action to ensure that the carriers complied with the established timeline for submission of the reports.

The AG’s report says in the absence of the reports, the Fund estimated its revenue based on the last three to five months of levies collected.

However, it says this method proved unreliable, as in the financial year 2013-14, the Fund had to adjust its revenue downward by $60.5 million due to over estimation.

The Auditor General’s Department is calling for the management of the Universal Service Fund to institute appropriate policies and procedures to ensure effective collection mechanisms and to identify non-compliance, with a view to taking appropriate actions.

It has further recommended that the policies should also facilitate timely and credible reporting so that the management will be in the best position to make decisions regarding the use of the funds.