G.O.B. to gouge Telemedia with increased tax
On Friday it is expected that government will introduce a bill to amend the Income and Business Tax Act to increase the tax on telephone companies from nineteen percent to twenty-five percent. That move caught Telemedia by surprise and today four managers sent a letter to Prime Minister Dean Barrow asking for an audience to discuss the matter. According to the managers, the move by G.O.B. is unprecedented and could have serious repercussions for the company.
Rafael Marin, Chief Information Systems Officer, Telemedia
“We sent a letter this today to the prime minister requesting for an audience. We expressed our concerns about the increase in business tax and the way in which we have been informed about it and the time seems to be a bit strange and we’ll ask the question why it is being done now. it is almost as if it’s tied on to the ongoing dispute between B.T.L. and G.O.B. and it would appear that it’s simple a means of pressuring B.T.L. in this dispute.”
Arturo Vasquez, GM, Service Delivery & Customer Support
“It is a fact that it is contrary to the accommodation agreement and that no other telco in the region is actual taxed on gross revenues, but in fact they are taxed on the net income. As it is, at a rate of nineteen percent it is considered high in a competitive environment. It is more in line for the monopoly environment which is no longer the case. When you look at the proposed twenty-five percent, that could have an even more significant diverse effect over all as it is it would be taking almost two-thirds of Telemedia’s profits.”
Karen Bevans, General Mgr., Business Dev., Telemedia
“In the telecommunications environment it is logical to create a tax structure that is conducive to or facilitate price reductions and more importantly universal service. This tax structure is contrary to that and the increase will definitely affect Telemedia’s operating expenses. Our expenses will definitely go up and we’ll need to review our operating expenses and reduce in areas such as our capital investments, our community contributions like our free internet to schools, our staff loans, staff costs among other key areas, of course. Our price subsidy is another one of them. We subsidise certain services and certain customer groups. Looking at those things and reducing in those areas will definitely become inevitable.”
Martha Molina, Head of Human Resources
“From a management standpoint we have always had good communication with G.O.B. and B.T.L. We can’t see why this would change as it can affect our consumers and the public at large. Until recently, we have been having some difficulty in communication as you can see with this proposed increase in our taxes.”
Karen Bevans
“We have concerns with the way in which we heard of the information. That is of course of great concern to us and we have not received anything official and so we decided to state our concern and invite the prime minister for an audience so we could discuss in more details and get his feedback as to what really is going on.”
According to the letter and the accompanying graph, Belize is the only country in the region where telecom tax is calculated on gross revenues as opposed to earnings before taxes, making telecom taxes in Belize the highest.
