Legal Authority Given For Collection of Telephone Call Taxes

Members of the Senate approved two pieces of legislation on March 31 giving legal authority to the Government to collect taxes imposed on certain telephone calls since 2012.

The Bills, the Telephone Calls Tax Act, 2017 and the Telephone Calls Tax (Validation and Indemnification) Act, 2017, were piloted by Minister of Foreign Affairs and Foreign Trade, and Leader of Government Business in the Senate, Hon. Kamina Johnson Smith.

The Telephone Calls Tax Act, 2017 was passed with eight amendments, while the Telephone Calls Tax (Validation and Indemnification) Act, 2017 was passed with one amendment.

The Telephone Calls Tax (TCT) took effect on August 30, 2012 by way of a Provisional Order, pursuant to Section 3 (1) of the Provisional Collection of Tax Act.

In 2012, it was proposed that $0.05 per minute would be imposed on calls originating and terminating on a public fixed network in Jamaica, $0.40 per minute on domestic and international calls originating on a public network in Jamaica, and US$0.075 per minute on all international calls terminating on a public mobile network in Jamaica.

Senator Johnson Smith said the Order was not confirmed as stipulated by Section (4) (a) of the Act, which posits that “an Order shall cease to have effect if it is not confirmed, with or without modification by Resolution of the House of Representatives, within the next 30 days on which the House sits after the date of publication of the Order in the Gazette”.

She said it is proposed to validate the collection of the Telephone Calls Tax from the period August 30, 2012 and ending on the enactment date of the proposed Telephone Calls Tax Act.

“It is further proposed to indemnify the Government and all persons who, in good faith, collected the Telephone Calls Tax during the period to the enactment date of the proposed Telephone Calls Tax Act from any and all liability,” she added.

Supporting the Bills, Opposition Senator, Mark Golding,  suggested that the Ministry of Finance monitor the Provisional Orders “more closely… and have specific responsibility reposed on a senior officer to ensure that the validation process is not required, because the permanent legislation is prepared and brought to Parliament in a timely manner”.

He further proposed that a review be undertaken of the Provisional Collection of Tax Act.

Addressing concerns raised during the debate by members regarding the time taken to validate the Bills, Senator Johnson Smith said the Government is committed to acknowledging things that are not working well, with a view to fix them.

Since the imposition of the Telephone Calls Tax Act, approximately $27 billion has been collected.

The Bills were passed in the Lower House in March.

Article by: Chris Patterson
Photo from: www.jis.gov.jm