Palace backs tax on text

By GENALYN KABILING
September 9, 2009, 6:56pm

Malacanang Wednesday threw its full support to congressional moves to impose five centavos excise tax on every text message sent through mobile phones.

Executive Secretary Eduardo Ermita said the government will support any efforts to raise much needed revenues to sustain the economic growth and improve social services to the people.

“The Palace will support any measures that will help generate funds and resources for governance,” Ermita said in a news conference. “We are confident if the both members of Congress see that it is useful for us to have more resources to support the projects, then that will be supported by the Palace,” he added.

Ermita said it was up to lawmakers to deliberate the pros and cons of the proposed revenue-generating measure, amid concerns the public may carry such additional burden. He assured that the President will study the measure, which seeks to generate some P30 billion a year for the government, before signing it into law.

“If it passes the House, the President will take the appropriate measure and see for herself the advantages and disadvantages of such a measure,” he said.

The proposed tax on text, or House Bill No. 6625, was passed by the House committee on ways and means last Tuesday. Proponents seek the tax should be shouldered exclusively by mobile phone providers.

Albay Governor Joey Salceda however opposed the tax on text proposal in Congress, saying it was a “bad economic and social policy.” He said he plans to recommend the President to reject such bill.

Salceda, also an economic adviser of the President, pointed out that short messaging service (SMS) is already subject to 12 percent value added tax and 30 percent income tax.

“There is no compelling reason to tax it more than other products. Unlike alcohol and cigarettes, there is no consumptive logic, i.e. welfare increases by penalizing and reducing its usage,” he said.

Salceda also warned that the bill on tax on text would also raise the cost of text packages patronized by many Filipinos by 50 percent since average is only 10 centavos. “With no landline, they rely mainly on text for communications especially overseas Filipino workers. Effectively this is an OFW tax,” he said.