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By Maricel V. Cruz and Chino S. Leyco, Reporters
Government wants to tax text messages—but not
if Congress can help it.
The proposal is meant to offset the foregone
revenues that will result from the tariff cut on oil products
recently ordered by President Gloria Arroyo.
A study conducted by the National Tax Research
Center showed that the Department of Finance can raise P40.2 billion
by increasing tax on short messaging system (SMS or texting) alone.
The study revealed that if the government will
implement P0.50 centavos tax for every text, it can easily raise P36
billion in specific excise taxes, and value-added tax will add P4.31
billion.
But if it imposes 10 percent as ad valorem rate
for every text, the government can come up with P5.54 billion, and
P664.3 million from VAT.
Lawmakers: ‘No way’
Rep. Edcel Lagman of Albay, chairman of the
House Committee on Appropriations, said, “The House leadership has
committed that there will be no new taxes during the first regular
session of the Fourteenth Congress. We shall abide with this
commitment to our people.”
Lagman also said taxing text messaging would
burden the ordinary users, holding that “text messaging is the
cheapest, fastest and most convenient means of communication
particularly for the masses.”
Even if the tax is imposed on the service
provider, it would just the same be shifted to the cell-phone user
through increased charges, Lagman said.
“A tax on text messaging would impair or
restrict the constitutionally guaranteed right of communication,”
he added.
“When one buys a cell phone, the price he pays
for the unit includes the corresponding value-added tax (VAT).
Another tax on using the said cell phone for text messaging would be
an uncalled for and unreasonable impost,” he added.
Instead of passing on the burden to consumers,
Lagman suggested a serious study be made on the advisability of
imposing a windfall tax on service providers, “considering that
the facility of text messaging does not require any additional costs
to service providers.”
Meanwhile, Senate President Manuel Villar Jr.
shot down the text tax, saying “the proposal defeats the purpose
of protecting the public from the ill effects of spiraling cost of
oil products as it entails additional burden to the people.”
Instead of creating an additional tax burden,
Villar suggested that “government double its efforts to improve
tax collection.”
The Nacionalista Party president said government
officials should come up with “solid proposals” on raising
revenues and refrain from “floating trial balloons.”
“[The public has] been subjected to several
rounds of new taxes, from sin tax to VAT, so the national mood is
against new taxes,” explained Villar, who decried that “the
government has been remiss in its duty to earmark part of VAT and
sin tax proceeds to social services, which the law requires.”
More sin taxes
Meanwhile, besides the tax on text messages,
Teresa Habitan, Finance director, said the proposal of increasing
tax on cigarette and alcohol beverages can also be availed based on
the current sin tax law.
“We regularly review the excise tax on cigar
and alcohol, because the last increase will happen in 2011,”
Habitan said. “This is in accordance with the current law, which
says that in every two years there will be an increase.”
Republic Act 9334, or the revised Sin Tax Law,
imposed an increase in the tax rate on alcoholic beverage and
tobacco products. The law was widely expected to generate P15
billion a year.
On its first year of implementation in 2005,
collections hardly improved as manufacturers front-loaded the
release of their inventory in anticipation of the new law.
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