‘Even if the House approves the measure, the Senate would certainly trash it.’
We frankly don’t know where Representatives Exequiel Javier and Eric Singson are coming from with their proposed P0.05 tax on text messaging.
The proposed tax goes against the principles of equity and equal application. It will be an administrative nightmare to implement. And last, it is unlikely to generate the revenues expected.
For these reasons, we doubt the House in plenary would pass the measure which was yesterday reported out by Javier’s committee on ways and means. Even if by some magic the House would approve the measure, the Senate would certainly trash it, also for the reasons mentioned above.
The proponents said Filipinos send 1 billion text messages daily. At P0.05 per message, that’s a cool P50 million a day. Multiply that by 365 days and the collection totals in P18 billion a year plus change, enough to build so many school rooms, buy so many computers for public schools, etc.
The beauty, according to proponents, is that the tax burden will be shouldered solely by the telecom companies because of a provision which provides that the tax cannot be passed on to users.
Now for the flaws in the proponents’ position. Assuming that the one billion volume of text messages is right, it is not true that users are charged P1 for every message sent. In most cases, text messages are an added value service to basic phone service. In most other cases, charges on text messages are packaged in a myriad disguises to the point where even the service providers would only know the actual tariff that applied in general, not on specific cell phone units or users.
The proponents said this could be addressed by installing metering devices at the heart of the operations of telcos. That would be an added cost, but the proponents insist the telcos could very well afford it because they are earning money hand over fist.
That probably was true a few years ago, but the reality is the profits of the telcos have been declining despite the continuing expansion of their subscriber bases. And the reason for declining profitability? It’s the end of the tax holidays on the capital equipment installed to build the business.
And what’s wrong with high corporate profits? The government already collects a 12 percent valued added tax. It also collects 30 percent of corporate profit in the form of income tax. Is it now acceptable for government to impose what amounts to a windfall tax, one that a company cannot pass on to consumers, every time a business proves highly profitable?
That the proposed measure will not deliver the expected revenues is a distinct possibility. The telcos could simply come up with voice call and text message packages where the latter would be classified as added services at no cost to subscribers.
The effect would be added burden to subscribers in the form of higher basic service cost. In the end, they would be deprived of a cheap and readily accessible means of communication, all because some legislators want to make "pa-pogi" or, worse, are harassing telcos for reasons that would invite libel suits if printed.
