By IRMA ISIP
January 11, 2008
CONSUMER group TXTPower yesterday retaliated against moves to impose a tax on text messages, launching a “hate text” brigade against Trade Secretary Peter Favila.
“U want to pay P1.50/txt? If not, pls txt GMA’s Trade Sec Peter Favila @ 09178176110 & tell him NO TO TXT TAX! Pls Pass – TXTPower,” the group’s text message said.
Favila, in a hurriedly called press conference, said some reports misquoted him as saying he was proposing the revival of the tax on text when he is merely supporting it “if there is a proposal” in the wake of the reduction on tariff on oil.
More amused than irked by the barrage of text messages he got yesterday, Favila is having his number changed. “I have already made a request.”
Favila said taxation and revenue-generation is the turf of the Department of Finance and imposing taxes is by law.
He said he supports anything that by law can be taxed. He said he does not want to focus on one specific sector, such as text messaging or telecommunication.
“Whatever the law prescribes. What is the lifeline of government? It’s tax,” he said.
Chief presidential legal counsel Sergio Antonio Apostol said Malacañang is not very optimistic about the approval of a tax on text messages but it supports the bill on the indexation of sin taxes.
Apostol said texting is already a “vice” among Filipinos, just like the sin taxes, because they cannot seem to shake off the habit of sending even unnecessary text messages.
“Ang text hindi humihinto, parang vice na ng Filipinos ang text. Kaya isama na rin yun,” he said.
“Palagay ko hindi lulusot iyon. Huwag yung text. Sin tax na lang,” he added.
Apostol said raising the tax on cigarettes and alcohol would also hopefully discourage some Filipinos from drinking and smoking.
He said he expects the opposition to block the bill on sin taxes for the sake of opposing.
TXTPower said text and mobile calls are already taxed twice. In a statement, it also said government collects 12 percent value-added tax on all local text messages and calls, as well as an overseas communications tax for international text messages and long distance calls.
Text rates vary but messages sent within the same network are the cheapest at P1 each.
TXTPower said a new tax would definitely jack up prices.
It called Favila “ignorant, callous and incompetent in denigrating” the value of texting to the public.
Favila, in an interview in Malacañang Wednesday, said imposing a tax on text messaging could make Filipinos shift their focus to more productive endeavors.
“Texting (sending text messages) is also a source of negative reason… (and) it makes people more cynical,” he said in an ambush interview.
TxtPower said: “Texting is the de facto messaging standard today because it is cheap. It is important to the public. It is used principally for personal and official reasons. The true source of public cynicism is not texting but the Arroyo government and its abominable projects such as this text tax.”
“Perhaps Favila does not know anything about the costs of texting because the public pays for billions of pesos in the government’s communications expenses,” TxtPower said.
The group said the text tax proposal runs counter to a purported policy of the Department of Transportation and Communications that calls on telecommunications firms to lower prices of their products and services.
TXTPower, which claims to represent a major portion of mobile phone users, launched a cyber protest in 2004 when the plan to tax text messages was first floated.
The Philippines is tagged as the text capital of the world, with 120 million to 150 million text messages sent daily.
TXTPower said as of end-2007, the Philippines had 55 million mobile phone users. Smart reported 30 million subscribers while rivals Globe and Sun reported 20 million and five million subscribers each.
A study conducted by the National Tax Research Center shows that a specific tax on text messages would yield P720 million to P35 billion annually on a tax rate of P.01 to P.50. Assuming every subscriber sends six text messages daily, the total annual estimated cost of text messages would be P71.86 billion.
TXTPower challenged President Arroyo to instead declare a moratorium on her foreign travels to save public funds and negate the need for the imposition of a new tax on text.
“Mrs. Arroyo spent P692 million in public funds for her 2005 and 2006 junkets alone. Another estimate is P8.2 billion for the past six to seven years,” TXTPower said.
Joining TXTPower in twin calls for the rejection the text tax and a moratorium on the President’s foreign travels were the Computer Professionals Union, the League of Filipino Students and the Kabataan partylist group.
Senate President Manny Villar said a tax on text messages will be an additional burden on poor Filipinos.
He said instead of passing additional burden to consumers, government must double on its efforts to improve tax collection.
He also said government should come up with “solid proposals” on raising revenues and refrain from “floating trial balloons” such as the one on the text tax.
“The proposal seems to be half-baked because it doesn’t take into consideration certain marketing developments in the ‘talk and text’ business. For example, how can you tax messages sent from unlimited text packages which are being sold by all phone companies?” he said.
Villar said text messages are now covered by the 12 percent VAT and the service providers, all telecoms giants, are slapped a 35 percent corporate tax on profits.
Villar also cautioned Malacañang against the text tax as he said it can be viewed “as a design to stop the use of cellphone in spreading text messages critical to the administration.”
“Filipinos have depended on texting as an efficient and cheap means of communication. Texting has become an integral part in strengthening relations among families and friends. In our daily routines, this technology has allowed us to accomplish more. A tax on this service means subscribers will have to pay more,” Villar said. – With Regina Bengco