JAMAICAN consumers have proved that talk’s not cheap, forking out almost $50 billion in telephone call taxes for the Government’s coffers over the last decade. But at least one technology expert believes the outlay could have been much more if the Office of Utilities Regulation (OUR) properly monitors the calls made on the networks of telecoms providers.

The Government in 2012, as part of measures to raise taxes for paying down the debt ahead of a new agreement with the International Monetary Fund (IMF), announced a tax of $0.30 per minute on all domestic calls for termination to the mobile networks and fixed lines. On international calls the tax implemented was US$0.075 per minute for calls terminated on the local mobile networks. When the announcement was made during the 2012 budget presentation the initial revenue estimate was that if the tax was implemented from June, some $5.25 billion would be collected. It was however delayed and not enacted until August of that year, with the estimates recast to reflect expected taxes from telephone calls of $4.25 billion in that 2012/13 fiscal year. However, the actual taxes collected were lower at $3.8 billion.

Since the implementation of the tax in August 2012 up to March 31, 2023 the telecos have handed over $47.8 billion in telephone call taxes which, though a hefty sum, was still $1.36 billion lower than the Government had hoped.

“I am not surprised at that,” Trevor Forrest, CEO of 876 Technology Solutions, told the Jamaica Observer about the near $48 billion in telephone call taxes collected over the last decade.

“One of the things it should indicate to anyone looking at that data is to give you an indication of the kind of revenues the telecommunications operators have been generating and collecting over that period,” he added.

The data also show that 64 per cent of the total tax on telephone calls, or about $31 billion of the almost $48 billion, was collected in the first half of the period in which the tax has been implemented.

“A number of factors can be attributed to that. The first one is: The reporting and how call revenues are reported may have changed,” Forrest pointed out.

He said under the current system the Government knows how many calls are made and received by a telecommunications operator, “based on what the telecommunications operator reports”.

“So on a cyclical basis the telecoms operators would report to the OUR that, ‘Here are the numbers of calls that were made and as such, based on the call rates and so on, this is the amount of money that was collected, and as such here is the amount of tax that you are supposed to receive.’ “

He contends that if that regime should change to one in which the OUR independently verifies what the telcos are telling it then the revenues collected would be more — even at a time when traditional voice calls are declining relative to an explosion in calls made using data apps such as WhatsApp.

“The second thing is, over a particular period of time there was an upswing in what we called bypass operations where a lot of legitimate calls were bypassed using bypass technology and machinery so that a lot of calls going in and out to the international space were not being realised by the telcos and as such, collections for those calls could not be made or recorded.”

He said the other factor impacting revenues from the telephone call tax is over-the-top (OTT) services such as WhatsApp, Facetime, Viber, and Blip etc, which can be used to make phone calls but do so over data service.

“Those kinds of calls would not be recorded because they are not technically going over the providers’ standard network for phone calls.” He said the Government must look to safeguard call revenues as telcos move more towards data and less towards traditional voice calls.

Still, judging from what can be collected now, Forrest said he believes the figures for telephone calls are woefully under-reported, and calls on the OUR to do more to ensure it is collecting the taxes as stipulated by the Government.

“Now the thing about that is that, interestingly enough, many years before over-the-top services became a problem, the telcos themselves had moved to that voice-over-IP technology, and you could say they were utilising the technology such that they could be billing for traditional service usage but using a more efficient technology, but never passing it on to the consumers,” he said.

Forrest argues that even when the telcos started using newer data technologies — which are faster and cheaper than traditional technology — to facilitate calls, none of the subscribers, the regulator, nor the Government knew.

“They were still delivering the same service at a lower cost to them but maintained the cost to the subscriber.” He said there could also be changes to the arrangement the telcos have with other providers across the globe, which would also impact how much they collect for telephone calls terminating on their networks.

But what seemed to irk him more is the old telecoms legislation which retards how much the Government can collect for call taxes.

“The current telecommunications Act is in desperate need to be repealed and replaced to reflect the current realities,” he said in light of the changing modality people are using to make calls, prefering to do so over data applications rather than traditional voice calls.

“What is very difficult to do is to now determine how many calls are traversing that network. The telcos know, but unless you have monitoring devices on their switches that can separate the different types of traffic to say: ‘Okay, this is voice traffic, this is YouTube, this is Twitter, this is Whatsapp,’ then even if the legislation is changed, if you are not monitoring them you are not in a position to adequately determine which traffic is specifically voice for the purpose of the taxes,” he explained.

“Now the law says they can only collect on voice calls. Well, if you don’t know how many voice calls — whether traditionally or voice-over-IP that are happening — then how do you know what you are taxing?”

Forrest pointed out that a few years ago the telcos were united in trying to block OTT services, including WhatsApp and Viber, but today are now embracing and providing similar services.

“What you are seeing now is that they are moving their service plans heavily weighted to data because that is the new consumption model. So [telecoms providers will likely now say], ‘If I can’t stop them from using over-the-top, and hence data, well okay. So they’re consuming more data? I will give them more data and charge them more.’ “

But with the legislation not allowing for the taxing of voice calls made over data networks, Forrest said he is longing to see talks about new telecoms legislation and an independent telecoms regulator come to fruition.

“With the advent of new technologies and so on, AI and the like, you need a purpose-built regulator for that. The OUR is not equipped for that so I think a new regulatory framework, regime, and body should be created for the new dispensation. Additionally, in the meantime, the regulator needs to implement a more robust, independent monitoring of the services that are provided by the telecommunications operators, and get a better eye into what is actually happening — and that itself would impact, to some degree, the revenue collection regime that is there. It would inform it a little bit better, in my view.”

The Business Observer reached out to the OUR for comments on the statements made. The regulator, however, indicated that while it would respond, it could not meet the deadline for this publication.