House panel hikes planned tax on text

MANILA, Philippines - Ignoring strong public opposition to the proposed tax on text messages, the House ways and means committee even increased the planned levy yesterday from five centavos to eight centavos per message.

The committee, chaired by Antique Rep. Exequiel Javier, tackled a substitute bill presented by Ilocos Sur Rep. Eric Singson, one of the proponents of the original five-centavo text tax.

Under Singson’s new proposal, the cost of every text message would be fixed at a maximum of 80 centavos, 10 percent of which, or eight centavos, would be the tax.

Those opposed to the planned text levy immediately criticized the substitute proposal.

“It is more harebrained than the original proposal. In effect, it will increase both the cost of text and the tax to be imposed on it,” Rep. Teodoro Casiño of the party-list group Bayan Muna said.

“The ways and means committee is like a headless chicken trying to impose new taxes on the public. The new proposal is so ridiculous it makes one ask what’s the real game plan,” he said. “It has probably something to do with the 2010 elections.”

Parañaque Rep. Roilo Golez said there is no basis for Singson and the Javier committee to set a price cap of 80 centavos per tax. “Why 80 centavos?” he asked Javier.

“That’s the ceiling. They (telecommunications companies) can lower it if they want,” Javier responded casually.

On questioning by Golez, National Telecommunications Commission Director Edgardo Cabarios reported that the average cost of text messages in 2008 was 11 centavos for Globe Telecom and 10 centavos for Smart Communications.

He also admitted that if mobile phone service providers petition the NTC for the inclusion of the proposed tax in their business cost so it could be passed on to subscribers, “we will have to grant it, unless there is a law restraining the NTC from doing so.”

Again in response to Golez, Cabarios said Congress would have to amend the Public Service Law to disallow telcos’ treatment of tax as business cost that they may pass on to the public.

But the Parañaque congressman stressed that proposing an amendment to the Public Service Law is not within the mandate of the Javier committee, which has jurisdiction over tax measures.

Even representatives of telecom companies were surprised by Singson’s proposal and Javier’s apparent support for it.

“Where are we going?” asked Globe legal counsel Rodolfo Salalima.

He reminded the committee that more than two months ago, mobile phone service providers began trying to reduce the cost of text messaging to 50 centavos after being asked by President Arroyo.

“Globe’s average cost for text messages is now 23 centavos, two centavos of which represent profit. We are trying to bring down the cost. Here, you are increasing it,” he said sarcastically.

Salalima also said there is no way telecom companies would absorb the proposed text tax.

“Let’s be honest to the people, let’s not deceive them. This is a pass-on tax. Whether you like it or not, we will pass it on,” he said.

He also expressed amazement at the Javier committee’s tackling of Singson’s substitute bill.

“This is an entirely different proposal. I suggest that you archive the previous bill and give us time to present a formal opposition to this new proposal,” he said.

Telecom companies, particularly Globe, have vowed to question a text tax law that would prohibit them from passing on the levy to their subscribers.

For his part, Bacolod City Rep. Monico Puentevella urged his colleagues to junk the proposed text tax.

“Life is already difficult for our people, especially for those affected by typhoons ‘Ondoy’ and ‘Pepeng.’ Let’s not impose more suffering on them,” he said.

Noting that Singson’s substitute bill is clearly more controversial than his five-centavo text proposal, some committee members suggested that the panel meet first to formally take a vote on it.

This prompted Javier to suspend deliberations and schedule another hearing.