Tuesday, September 08, 2009

Public should not pay for tax on cellphone texting, says House Speaker

MANILA, Philippines - Speaker Prospero Nograles has assured that any move to raise revenues to support the national government’s development programs should not add to the burdens of the tax paying public.

"We will not allow any such additional taxes on the shoulders of the public," Nograles assured.

With this position, the Speaker said he will ask an assurance from the authors of the so-called "tax-on-text" bill and the Committee on Ways and Means chaired by Antique Rep. Exequiel Javier that any tax on text will not increase the existing text cost now being billed on millions of consumers before throwing his full support for this measure.

"It is very clear that based on our previous hearings on this text issue, there is no need to increase cost on the short messaging system service of our telcos because the P1 per text that is already being charged from the consumers is more than enough to cover the five centavo tax for each text," Nograles said adding that based on studies, the estimated threshold amount or cost of text is about 25 centavos.

"There will be no additional cost on texting. Based on our estimates, our telcos still rake in a lot of profit at a cost of 50 centavos per text. So instead cutting down on the cost of texting, telcos should allocate at least 20 % of their profit to a trust fund for education and health care. It is my position that the proposed additional tax on text will be borne by the service providers and that the consumers will not be paying additional costs for texting," Nograles added.

The ways and means panel has just approved a substitute bill to House Bill 6625, authored by Deputy Speaker Eric Singson, in consolidation with the pertinent proposed provisions covered by House Resolution 282 filed by Committee on Oversight chairman Danilo Suarez.

The still unnumbered substitute bill will contain the provision, subject to style, found in the original Singson bill (HB 6625).

Nograles stressed that under HB 6625, Section 6, "The excise tax levied herein shall be paid and absorbed by the Mobile phone and overseas dispatch or message service providers who shall be prohibited from passing on the cost of such tax payments, either directly or indirectly to any consumer in whatever form or manner, it being the express intent of this Act that the excise tax shall be borne and absorbed exclusively by the mobile phone and overseas dispatch or message service providers. Provided, that any violation of this Section shall be a cause for suspension of the franchise granted to such mobile phone or overseas dispatch or message providers; Provided further, that, such suspension shall be in addition to any of the applicable penalties enumerated under the NIRC of 1997, as amended."

The above mentioned provision shall be included in the substitute bill, subject to style, before the Committee on Rules chaired by Majority Leader Arthur Defensor shall schedule the same for plenary consideration, fine tuning if need be, before approval.

"I support the House leadership's stand of not passing such additional tax burden on to the texting public," Defensor said.

HR 282, which was adopted by the House of Representatives on December 17 last year, directed the Committee on Ways and Mean to conduct an inquiry, in aid of legislation, on the possibility of installing a metering device to directly link the BIR, NTC and telecommunications companies to be able to capture all the revenues by the mobile telecommunications companies in their database such as, but not limited to, e-loading, sale of prepaid cards, text messaging and interconnection fees to generate additional revenues in line with the balanced budget target of the government under the 10-point agenda of the Arroyo administration. (Gil Bugaoisan)

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