New cellphone tax in aid of election

For the past few months, the House committee on oversight quietly studied how revenue agencies could jack up the proceeds from gazillions of pesos in a new tax to be siphoned off from Filipino cellphone users.

In its narrow view, the House panel avers that government is not able to check whether the taxes remitted by telcos were above board and commensurate to their total income and sales. Lest we forget, the government already imposes a 12 percent VAT on calls and text as well as an overseas communications tax on international services. These taxes apply to all subscribers, whether postpaid or prepaid.

For these Members of Congress, the solution to the purported loopholes in VAT and OCT collections is to ask the public to pay between five to 50 centavos in a new tax. Proceeds will go to buying metering machines each worth between $20M to $30M. The metering machines would connect the BIR, NTC and the telcos and would purportedly plug the loopholes.

Just like Senator Richard Gordon, the House panel attempts to prettify the new tax by saying that proceeds would also go to the computerization of schools.

Let me count the ways why this new tax cooked up by the House panel and passed on to the NTC smells like a rotting carcass:

1. Procedurally, the House panel did not invite — not even once — representatives of consumers and taxpayers despite claims in House committee report number 1942 that they asked *all* stakeholders about their views. Ergo, this new tax is taxation without representation.

2. Procedurally, too, the NTC did not adequately inform the public on its so-called public hearing the other day.

3. Procedurally, new taxes must be initiated by the House. That is what the Constitution says. In this case, the House proposes to circumvent the Constitution by asking the NTC to adopt the new tax as a mere fee to be collected from telcos.

4. How much would one metering machine cost: Anywhere between P945-million to P1.5-billion each! If government decides to purchase 10 of these to cover all revenue streams of the telcos, the lucky contractor will earn roughly the equivalent of: 1) the entire budget of the Comelec to automate the elections; and 2) the entire budget of a presidential candidate or several senatorial candidates.

5. Privacy concerns are important — We wonder who will have access to these metering machines, what kind of data will pass through and captured by government. Our officials have no business tinkering with our calls and texts and this is especially alarming considering how the present dispensation treats its critics.

6. Who owns E.L. Enterprises who gave the price quotation for the machines?

While governments around the world are working their asses off to find ways of perhaps alleviating hardships felt by their citizens on account of the global financial crisis, our government wants a new tax. How “manhid” can they be?

Some idiots say that what’s five or fifty centavos in exchanging for good things for the country, especially the kids in public schools. No one is fooled. We are not talking here about mere centavos but billions upon billions of pesos to be handed over to one of the most corrupt governments in the planet. We have heard the same argument for VAT but look where we are now — a nation with a growing army of jobless and underemployed led by a hopelessly corrupt government.

The committee report is a actually a good read, but I end up having different conclusions. I think government should look into how its foreign counterparts check on tax payments of telcos in their jurisdictions. I doubt if they employ such machines. What is important is the realization that government can compel the telcos here — Smart, Globe and Sun — to do something. In this case, a review of the earnings and profits of these companies would let anyone arrive at several logical conclusions: They are “tubong lugaw”. They are earning gazillions in profits and have no problems paying loans used in acquiring mobile technology equipment like cellsites and base stations. Having said that, it is high time for drastic price cuts to reflect the full return of investment courtesy of the huge sales, generally steep prices. I think I can safely say that most, if not all, Filipinos have every right to demand cheaper rates for mobile phone services after years of paying arbitrarily-set and high rates. In fact, the standard rates have remained generally the same and whatever bargains that are available are mere promos that telcos can conveniently pull out at whim.

From the point of view of both a consumer welfare advocate and a new media practitioner, it is quite interesting that this new tax is being proposed as we are all gearing for the 2010 elections where billions of pesos are needed to run and win. If in 2004, the administration used the GSIS and the Fertilizer Fund to finance Gloria Macapagal Arroyo’s fraudulent campaign and election, what’s stopping the administration from using this tax for narrow political interests.

I think it is downright insulting for the House panel and the NTC to think that Filipinos will fall prey to the cavalier misuse of our desire to have computerized schools as a ploy to attract support for this new tax. In truth, the House has all the power and prerogative to allot billions of pesos to education as well as other important social services sans imposing a new tax. It is shameless blackmail for the House panel and the NTC to claim that we can’t have computerized schools without this tax. The real problem is the totally insane and anti-people perspective shared by President Arroyo and the House in 1) revenue generation (they opt for indirect taxes like VAT that hit the poor and the middle class more); and 2) prioritization in terms of spending (they spend lavishly on non-productive ends like servicing onerous, ill-gotten foreign debt, foreign trips, new offices, cosmetic changes, military spending, political assassinations, filing of trumped up charges against foes, publicity blitzes and the like)

We in TXTPower wish to put the House panel led by Rep. Danilo Suarez and the NTC on notice that we will stand up and oppose their proposal.

(Disclosure: This blogger is the president of TXTPower.)


  1. thegreatest

    You know what, it’s about time the majority of the masa are forced to pay for a damn process that they so unfairly skew, usually in the wrong direction.

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