Guyana to close Net cafes that offer cheap calls

GEORGETOWN, Guyana (AP) -- The South American country of Guyana plans to close hundreds of Internet cafes that it accuses of bypassing the telephone company system to offer cheap international calls.

The Revenue Authority accuses the cafes of tax evasion because they do not charge sales tax or other fees for calls made through Internet-based phone services like Skype, Vonage and Packet8.

The tax agency says cafes are multiplying so fast that "their collective impact on the national revenue is too significant to ignore."

It says callers who use phone companies Digicel and the Guyana Telephone & Telegraph Co. account for 16 percent of the country's sales tax revenues.

GTT spokeswoman Allison Parker praised the move on Wednesday and said the agency has long complained about the cafes' effect on revenue. GTT is owned by Salem, Mass.-based Atlantic Tele-Network Inc.

Several countries have made moves to block or stifle phone calls over the Internet because they bypass taxation and local phone monopolies. Software that sniffs out phone calls has been used in Saudi Arabia, Egypt and China among others. U.S. regulators prohibit the blocking of Internet calls.

© 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy.