Telecom companies to pass on tax cut benefits to customers |13 April 2010

In line with ongoing tax reforms, the GST has been reduced from 17.65% to 15% and the companies are passing on the benefit to their customers and in some cases rounding off the figures to their clients’ advantage.

This came to light yesterday when Finance Minister Danny Faure visited the Intelvision telecommunication company’s headquarters at Providence in the company of the ministry’s director general for policy and strategy Rupert Simeon.

The company’s chief executive Trishend Kambaran said from the savings the company is getting, it has been able to increase the number of television channels it is offering its clients to reflect 30% more content at no extra cost, also as a result of the reduced taxes.

He agreed there are many complaints from customers who say their services are interrupted, but blamed this on power outages.

“Amplifiers in our network need power to operate and every time there is a power cut they fail, but we are installing battery-powered back-up systems which will be able to sustain supply for up to three hours from the time of power failure,” he said.

Mr Simeon said they are visiting different companies and finding out if they have passed on the benefits in taxes that were announced by Minister Faure in the last budget address.

In the budget address, Mr Faure said the government would remove the cascading effect of GST on businesses that are liable to pay GST on their services or goods resulting in cost savings for these businesses which should provide scope for them to reduce the price of their services or goods to the consumer.

“Businesses that will directly benefit from this change will include telecoms, insurance companies, professional services, restaurants, hotels and other operators in the tourism sector and I call upon all of these business owners to analyse their GST savings under this change and to pass on the benefit to the consumer.

“The GST calculation for imported goods will be simplified, with a flat rate of 15% being applied to the value of the imported goods (inclusive of the Trades Tax) without any recourse to the current practice of having to nominally increase the value of the imported goods by 15 to 30%, for GST calculation purposes, to take into account a deemed profit margin.

This change in the way the GST is calculated will result in a lower amount of GST being incurred on most imported goods than under the current system, again with the aim of this reduction of GST to be passed on by the importer to benefit consumers,” he said.