Channel Islands Backtracks on Tax Change for Small Telecoms Operators

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The Channel Islands Competition and Regulatory Authorities (CICRA) has approved a temporary amendment to its licensing rules for some Guernsey companies to offset the unintended impact of rise in the Tax on Real Property (TRP).

The change affected only companies that had a minor telecoms operation but were facing taxes that more than doubled on their entire property.

The CICRA noted that "several licensees carry out telecoms activities as a relatively minor part of their larger business. The TRP increase as worded in the law applies to the entire premises where their telecom business is carried out, which in several cases represent a very small proportion of their overall usage of premises. The disproportionate effect on such businesses appears likely to force them to withdraw from the provision of telecoms services.

"In the above circumstances such licensees have informed CICRA they cannot sustain their telecoms businesses."

Following discussions with the government, where an amendment to the law could not be enacted quickly, and agreement from the larger telcos not to object -- the regulator will reclassify the smaller companies to avoid the tax.

"In light of the urgency of the matter, as a temporary measure CICRA has decided to use the GCRA's powers available to it to address the risk faced by such businesses until a more considered review can be carried out of the approach to setting TRP for all telecom licensees in Guernsey."

The law should be amended later this year.

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