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Digicel slams telecoms tax

Published:Wednesday | May 30, 2012 | 12:00 AM

Mark Linehan, chief executive of Digicel Jamaica, says the newly proposed telecommunications tax will prove harmful to the sector in which his company operates, as well as the broader economy.

Noting that a vibrant telecoms sector is a boost for capital investment, jobs, and business opportunities, Linehan said the new tax will serve to restrict investment. And it will serve to limit the spend on improving broadband access and internet penetration, he said.

"Digicel is strongly urging the Government to reconsider the imposition of these excessive taxes on the telecoms sector ...," he said. "While these punitive taxes on the telecoms industry may assist the Government's budget shortfall in the short term, ultimately it will be detrimental to the development of Jamaica in the medium to long run. The imposition of these taxes will severely restrict further investment in Jamaica by the operators and their ability to assist in the development of the economy, ultimately harming businesses and consumers."

Finance Minister Dr Peter Phillips has proposed a 30 cent per minute charge on domestic calls, and a US$0.075 per minute charge on international calls terminating on mobile networks.

Digicel said the new charges, atop the existing 25 per cent GCT rate applied to the industry, and the 33.3 per cent corporate tax rate, make telecommunication one of the "most tax-burdened industries" in Jamaica.