Will this mean higher cellphone bills?

The House of Representatives has approved on second reading a bill seeking the imposition of a 10 percent tax on cellular telephone companies.

Before the bill's approval, opposition congressmen expressed fear that these companies may eventually pass the tax on to their millions of subscribers.

However, Rep. Danilo Suarez (LAMP, Quezon), chairman of the House ways and means committee, assured his colleagues that the measure contains provisions that would ensure that the cellphone firms will shoulder the levy.

Collections from the tax would go to a fund for computer education programs.

Responding to questions from Minority Leader Feliciano Belmonte Jr. (Lakas, Quezon City) before the approval of the bill, Suarez said the government could earn as much as P7 billion from the tax, based on the cellphone companies' gross revenues.

He said these firms have a combined gross earnings of about P70 billion a year.

Belmonte decried the fact that the bill is purely a tax measure.

He said the committee could have addressed in the same piece of legislation, the problem of inefficiency of cellular phone companies.

House leaders said while they have allowed the approval of what they described as "Suarez's cellphone tax," they would block its eventual passage.

"The people are overburdened with so many taxes. We don't need new levies. What we need is increased collection efficiency," one official, who did not want to be identified said.

He said if the collection efficiency of the Bureau of Internal Revenue (BIR) and the Bureau of Customs continues to improve, the argument against new taxes would be strengthened.

He added that BIR collections last month grew by 12 percent compared to target levels.