Consumers of telecommunications services are expected to see the benefit of the Government's decision to reduce Value-Added Tax rates to 12.5 per cent from 15 per cent in January 2016.
Flow and C&W Business yesterday announced that they were adjusting the rates of the packages for internet, cable and landline services due to the change in the VAT structure, which was announced by the government during the budget statement on October 5, 2015.
In a statement, the companies said: "These changes do not reflect an increase in prices but an adjustment due to the change of Value Added Tax (VAT) from 15 per cent to 12.5 per cent. The changes will take effect on January 1, 2016."
The price changes are being made in order to maintain uniformity in line with our existing pricing structure across our products and services. The overall cost for some packages will be reduced and some will remain the same based on the pricing scheme. Customers will not pay more than they are currently paying on any product or service and the new prices will be reflected in the January 2016 invoice.
In delivering the 2016 budget, Finance Minister Colm Imbert said that he proposed to "improve efficiency in collection and to broaden the base by reviewing and adjusting exemptions and zero-rated items which are associated with non-essential or luxury items, and which are not critically important to the livelihoods and basic cost of living of our citizens.
"And consistent with our 2015 election manifesto promise, I propose to reduce the VAT rate from 15.0 per cent to 12.5 per cent. The combination of widening the base, increasing collection and compliance, and reducing the rate is expected to yield approximately $4 billion."
Imbert also noted that the base and efficiency of the VAT regime have been consistently eroded since its establishment in 1990 and that the measures will take effect on January 1, 2016
