Debbie-Ann Wright, News Editor
The Gleaner/Power 106 News Centre
Digicel is expressing strong opposition to the proposed telecoms tax measures unveiled by Finance Minister, Dr. Peter Phillips, in his budget presentation last week.
The proposal to impose a US$0.075 tax per minute on incoming international calls terminating on mobile networks is expected to yield $5.2 billion.
However, the telecommunications company said while the tax measures may assist with the budget shortfall in the short term, it will be detrimental to the development of Jamaica in the medium to long term.
Digicelís CEO Mark Linehan said the imposition of the tax will severely restrict further investment in Jamaica by telecoms operators, ultimately harming businesses and consumers.
He said the new tax must be considered in light of the existing 25 per cent GCT rate applied to the industry.
Linehan has also pointed to the fact that the sector will continue to be taxed at the highest corporate tax rate of 33.3 per cent.
Meanwhile, making his presentation to the budget debate yesterday, opposition finance spokesman, Audley Shaw, expressed doubt the government would be able to collect the tax.
Shaw also noted that the government was proposing to impose a tax with extra-territorial effect and that it could not be implemented immediately, as the telecoms companies would have to do their due diligence.
He is contending the proposal is not well thought out and will either have to be abolished or will not realise the expected revenue.