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Solon wants tax on telcos’ windfall profits, not on SMS

Posted at 03/23/2009 11:37 PM | Updated as of 03/24/2009 1:06 AM

As house leaders pushed for the crafting of a revenue measure involving a 10-centavo tax on cell-phone short messaging service (SMS), a militant legislator suggested a tax instead on the windfall profits reaped by mobile-phone providers from their text-message service.

“We should remember that SMS is built into the GSM technology. It was even provided free of charge before. So when they started imposing a price on text, this, in fact, constituted a windfall profit that the telecommunication companies never dreamed of. It is that windfall profit by Globe, Smart and other telcos that should be taxed, not the already-burdened consumer,” said party-list Rep. Teodoro Casiño of Bayan Muna.

Casiño, a member of the House ways and means committee, said recent hearings in the House Committee on Information and Communications Technology focused on the need to reduce text-messaging rates considering that these are value-added services and hence should not even be charged to the consumer.

“Clearly, the entity that should be taxed here is not the consumer who is already being unfairly charged for a value-added service, but the telecommunications company that is wallowing in undeserved cash. Can you imagine that through their prepaid cards these companies are even asking subscribers to pay in advance?” said Casiño.

“For too long, these big companies have foisted their unfair and monopolistic practices on a hapless public. It’s about time government make them give back the billions they have reaped from their text messaging racket,” he added.

Casiño said a windfall-profit tax should not be passed on to consumers but should be paid by the companies themselves based on their declared profits on texting.

Casiño made the proposal after Kabalikat ng Malayang Pilipino Rep. Danilo Suarez of Quezon, chairman of the House oversight committee, proposed a 10-centavo fee per text message, which he said could help generate a huge amount that could be channeled to education and other socioeconomic measures under the government’s economic-stimulus program to help mitigate the effects of the global economic meltdown.

Suarez said a 10-centavo tax per message could generate the government some P200 million a day for its economic-stimulus program.

But senators immediately opposed the proposal, saying instead of imposing tax on SMS, legislators should look into additional taxes on telecommunication companies with an assurance that this would not be passed on to consumers.

Senate President Juan Ponce-Enrile said he would not attempt to impose a tax on “texters.”

“Maybe I will impose a tax on the companies themselves but not on the texters,” said Enrile.

Sens. Manuel Villar and Francis Escudero also opposed the proposal, citing the present global financial crisis.

 


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