Telecoms tax clobbers landline usage, says Flow
Published:Sunday | October 21, 2012 | 12:00 AM
Michele English, president of Flow Jamaica, says landline usage has fallen following the application of new surcharges in July 2012 on local and international calls.
"Our data reveal that consumers have responded to the additional cost of the tax by reducing the number of calls they make. We have seen a reduction of up to 10 per cent of the number of outgoing calls in all categories," English said on Thursday.
The telecoms tax imposed in mid-July puts a levy of five cents per minute on fixed-line calls, 40 cents for mobile calls made from and in Jamaica, and 7.5 US cents for incoming calls. The new tax measure is meant to raise J$5.25 billion as funding for the budget in the current tax year.
LIME Jamaica meantime said it was too early to assess the impact of the tax; and Digicel Jamaica said new CEO Andy Thorburn would not comment at this time.
Both companies have adjusted charges to compensate for the new telecoms tax on fixed- and mobile calls, with LIME abandoning several of its cheaper bundled packages and cutting minutes from others.
"We are still in the implementation phase of the special telephone call tax...," LIME said Friday. Otherwise, the company said it has seen a bump in call traffic and subscribers on its mobile network since introduction of its Talk-EZ rates for J$2.99 on-network and J$6.99 cross-network.
The company also indicated it was not inclined to comment on the special tax burden citing competitive reasons.
"if we tell you what we are paying out in taxes collected they (rivals) will know the number of minutes behind that," said Regional Head of Corporate Commun-ications Kalando Wilmoth on Wednesday.
Meantime, English on Thursday called the tax burdensome to business.
"While we continue to offer customers the best value for their landline telephone service with free Flow-to-Flow calls, the lowest rates to call a landline on another network and truly unlimited international calls, customers still face the burden of the additional cost of the Government's special telephone tax," she said.
Her position reflects that of former Digicel Jamaica CEO Mark Linehan who, at introduction, called the new tax a blow against those who had invested heavily in establishing infrastructure to support the industry locally.