VAT on internet services will help to fund development of ICT- Minister Hughes

Minister of Public Telecommunications, Cathy Hughes on Wednesday announced that $114M have been set aside in the 2017 National Budget is for the provision of public internet access points. There will also be free internet access at government buildings for which $600M was set aside.

Outlining several plans to upgrade the country’s Information Communication Technology (ICT), the Minister said Value Added Tax (VAT) on data is necessary for the development of the sector.

“I want to remind us all that it is a necessary revenue stream given the range of transformational measures I have shared. In the long-run with the new liberalised environment that will spur competition, I expect to see our high cost  of Internet access, when compared to other parts of the Caribbean, reduced in time, and that will benefit us all. Free internet access at the ICT hubs will nonetheless provide valuable support to many” the Minister said.

The opposition People’s Progressive Party/Civic (PPP/C) along with the Private Sector Commission (PSC) have argued that VAT on Internet services data does not support the government’s touted ICT transformational projects.

During a Press Conference on Thursday last, the Guyana Telephone and Telegraph Company (GTT) Chief Executive Officer 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.

Digicel Guyana also condemned this move which it agrees run counter to Government’s touted ICT projects.

Minister Hughes told the house that the Ministry during the year of 2016, several communities were equipped with ICT hubs, several secondary and tertiary educational institutions were linked via the E-Government network and several training programs were conducted. She added that the government will be perusing electronic payment system for pensioners in near future.