Panama To Tax VoIP Calls As Traditional Phone Calls

by Mike Godfrey, Tax-News.com, Washington

23 January 2004

Lawmakers in Panama last week approved new rules which will tax telephone calls made over the internet (known as Voice over Internet Protocol, or VoIP) at the same rate as traditional phone calls.

The tax, set to come into force in March, will impose a 12% levy on all international calls, regardless of how they are made. According to reports, the move comes in response to a revenue drop of around $12 million for the Panamanian government which has resulted from the increasing use of VoIP technology.

The announcement has received a mixed response from the broadband industry in Panama, however.

Speaking to the CNET News service, Bryan Weiner, president of the jurisdiction's largest VoIP provider, Net2Phone, expressed support for the government's "one law covers every technology" approach, observing that:

"Some might say it's bad news, because it's a tax. As long as it's a level playing field, we're happy."

However, Huw Rees, spokesman for broadband phone service provider, 8x8, condemned the new approach as "confusing and convoluted", adding:

"We're not trying to break the law. But some of them are pretty foolish."

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