PUTC probes pre-paid phone cards

The House Committee on Public Utilities, Transportation and Communications will investigate the proliferation of pre-paid phone cards on the island for possible violation of the local tax laws, its chairman said yesterday.

The panel will meet with officials of the Department of Finance Revenue and Taxation Division as well as representatives of local telecommunications companies, IT&E and GTE-Pacifica, to discuss the issue.

According to PUTC chair Rep. David M. Apatang, the House will look into the transaction of pre-paid phone cards following complaints that several of them have popped up in the market and are currently being sold to the people.

These cards usually carry toll-free numbers which one must dial first before you get connected and are priced much lower than prevailing rates of the two existing phone companies.

Apatang claimed they are not subjected to local tax because firms or individuals selling these cards are not licensed by the CNMI government.

“It’s not fair with other legitimate businesses which pay their obligations to the government, like taxes and license fees,” he told in an interview, adding that they are losing revenues due to the stiff competition offered by growing number of pre-paid phone cards in the market.

Apatang also suspected that an individual or one company is behind this business, noting these pre-paid phone cards now available in the market have toll-free numbers situated in the mainland.

The committee is expected to recommend some steps for the Legislature to consider once its investigation is completed, which may include drastic measures as regulation of the pre-paid phone cards to be sold in the Northern Marianas.

Popular among the thousands of nonresident workers on the island, these cards can readily be bought in stores for less than $10 and be used for as much as 40 minutes for calls in the Philippines, or nearly two hours for mainland or Guam connection.

Meanwhile, Apatang expressed support behind a decision by GTE Pacifica, the island’s lone payphone service provider, to raise its rate for the first time in a decade from 25 cents to 35 cents beginning May 1.

“We have to allow them to make money too because maintaining these payphones is getting expensive nowadays,” he said.

GTE Pacifica has defended the rate hike to the increasing cost of providing the service to island residents, which has shot up drastically since it set up its first payphone here more than 10 years ago.