House to pursue probe on prepaid phone cards

Although the Senate has taken the initial step to clamp down on illegal prepaid phone cards on the island, the House Committee on Public Utilities, Transportation and Communications will pursue its two-month investigation into possible violation of tax laws.

Committee chair Rep. David M. Apatang called on the Department of Finance to expedite inquiry on the proliferation of this type of service, which has mushroomed in recent months.

The panel has yet to break any ground on its probe as finance officials are still conducting review of the records of existing companies providing this service and checking whether they comply with tax laws and other government regulations.

Apatang said the House would study the bill passed by the Senate, which will task the Commonwealth Utilities Corporation to implement rules and regulations governing the operations of prepaid phone services on the island.

The measure, offered jointly by Senate President Paul A. Manglona and Sen. Juan P. Tenorio, seeks to regulate the sector and protect the public from unscrupulous businessmen who have ventured into this type of activity.

It will also assess registrations fees of $200 to establishment engaged in this type of business, while imposing penalties for illegal activities of up to $5,000 and/or imprisonment of between one and five years.

“I don’t have findings yet as far as the investigation is concerned as I have not received anything, any feedback from (finance officials),” Apatang told reporters in an interview yesterday.

The probe will determine whether these phone companies are licensed to sell telephone cards and whether they are paying their tax dues, such as the business gross revenue tax.

“We have to protect our businesses here which are duly licensed and are paying tax,” the representative pointed out.

While PUTC has yet to assess the severity of the problem, Apatang claimed several types of prepaid phone cards are “brought in from outside and all you do is dial 1-800 numbers,” which are being sold at a cheaper price in convenient stores.

He added these are different from those carried by local telephone companies.

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

Meanwhile, Apatang said he has instructed DOF to take action on the growing number of remittance service centers in the CNMI, as he raised the possibility that some may have been violating government regulations.

“I have even given them a certain location as to where these businesses are,” he explained. “I need them to take action and check whether these businesses are legal and if they are illegal, then close them down and have them pay the tax.”