Our Telekom Allegedly Owes Solomons Government Unpaid Sales Tax

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Reports show company owes $9.5 million for past 5 years

By Daniel Namosuaia

HONIARA, Solomon Islands (Solomon Star, March 25, 2014) – Our Telekom Company limited has been reported to have owed the government millions in unpaid sales tax from its prepaid Me Top Up services throughout the country.

Reports revealed since 2009, the company has not been paying any sales tax to the Inland Revenue Division within the ministry of finance and treasury.

Chief Executive Officer of Telekom Company Loyley Ngira when contacted said unless this paper revealed its source, he will not make any comments.

This paper is aware that this issue has already been raised with relevant authorities last year following reports that such practice is illegal and unfair to other competitors in the telecommunication market.

Solomon Star understands it is a requirement by law under the Inland Revenue Division that all telecommunication businesses operating in the country have to pay a 10 percent sales tax on all its service business activities.

It was reported that an estimated value of SB$70 million [US$9.5 million] in sales tax has not been paid to the government to IRD from Solomon Telekom over the past five years.

Deputy Commissioner of IRD George Tapo when asked to confirm also refused to comment saying it is a tax payer’s specific question which IRD will not comment on.

However when asked, Telecommunication Commission of Solomon Islands (TCSI) confirmed that they are aware of the issue and are dealing with the issue with parties concerned.

TCSI spokesman Haggai Arumae said they have already made contacts with IRD and Solomon Telekom over the issue and hope to come out with an amicable solution.

Mr Arumae said it is an issue that will have to be dealt with accordingly since they have the power to make any decision.

Solomon Star understands the non payment of sales tax on prepaid Top Up services by Telekom has had a negative impact on its competitor Bemobile Company which also delivers similar telecommunication services.

It was reported that this situation has made the market very difficult for Bemobile to compete which essentially sees Telekom Company 10 percent more profitable than its competitor.

In such case, Telekom has been giving its customers (Top Up Agents) 20-22 percent margins instead of a normal 8-12 percent which is said to be the normal amount most businesses should have got in the region and the country.

Solomon Star also understands that Bemobile is struggling to compete with the margins Telekom is giving away since it cannot compete with such a big margin.

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