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VAT could be added to Internet services as result of Budget 2017 measures- GTT

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Even before the commencement of the 2017 Budget debates, companies are already preparing to implement measures to cushion the impact of increased taxes that were announced. Unfortunately, this means regaining their losses from consumers.

During a Press Conference on Thursday afternoon, the Private Sector outlined how the tax administration measures announced by Finance Minister, Winston Jordan on Monday last will inevitably filter down to consumers.

According to Chair of the economic sub-committee of the PSC, Ramesh Persaud, certain items are no longer exempted from tax. “We have seen the disappearance from the list of things like (private) education services, (private) health care services that no longer exists as exempt or zero-rated…internet services, data, mobile data were all zero-rated, right now, it is not on zero-rated, it is not on exempt” he explained.

Given the changes to policies surrounding the services sector, consumers of the Guyana Telephone and Telegraph Company (GTT), e.g. can brace themselves for a possible increase in the cost of their data and bandwidth.

Dubbed as the “Littlest business friendly budget”, Chief Executive Officer of GTT, Justin Nedd on Thursday said “Frankly, we’re stunned at the government’s proposal regarding VAT, if it is actually implemented as we interpret and we see the harmful impacts to the consumer and this reflects a, what I would consider 180 degree inconsistency with the goals of bridging that digital divide and expanding and modernizing the ICT sector”.

The CEO claims that the implementation of the Tax Administration measures announced by the Finance Minister will force the company to implement VAT on its data and other services since it will be unable to absorb that increase.

“By our estimations, if we put VAT on data which is your broadband internet, your mobile phone data, as well as the data that we sell to our corporate customers, we see that as an increase of about US$6M per year for the current service; that is US$6M which would be passed to the customers and that will stymie demand for services and create a negative cycle” he outlined.

Nedd further stated that it is the company’s goal to remain profitable while investing in improving its services to the Guyanese population.

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