MANILA - The Finance Department is backing a proposed bill seeking to impose excise tax on text messages, saying this could generate as much as P29 billion in additional revenues for the government.

But Ma. Lourdes Recente, director of the the department's research and information office, said the tax should not be passed on to consumers. She noted that a no-pass-on provision should be adopted in the bill.

Last July 28, Ilocos Sur Rep. Eric Singson filed House Bill 6625 seeking to impose an excise tax of P0.05 per short message service or text message, multimedia service sent from cellular phones one every overseas dispatch, message or conversation originating from the Philippines.

According to Singson's bill, the text tax could raise P36 billion for the government.

“At the core of the challenge is to create a fiscal environment characterized by a steady stream of revenues which is of course necessary for the provision of our people’s basic needs,” Singson said.

He pointed out that the global economic slump has contributed to the further deterioration of the country's finances.

“The contagion has put a strain on our resources, resulting in questions about our capacity to manage our limited coffers and at the same time provide better services for our growing populace,” he said.

Singson, however, pointed out that the bill includes a no-pass-provision to make sure that the public is not given an additional burden to bear.

“The bill prohibits the mobile phone and overseas dispatch or message service providers from transferring the tax to the end-users,” the congressman added.

Major players led by dominant mobile network provider Smart Communications Inc., Ayala-controlled Globe Telecom, Digitel of taipan John Gokongwei, and Bayan Telecommunications of the Lopez clan have strongly opposed the plan to impose additional tax on the services that they render.

The government is looking for new revenue sources as it is seen to hit a record deficit of P250 billion this year, up from a shortfall of P68.1 billion last year, due to dwindling tax efforts and accelerated spending.