Globe Telecom and Smart Telecommunications Friday denounced the proposed 5-centavo excise tax on SMS, MMS and overseas dispatch as one of the worst anti-consumer legislations ever made.

It will surely trigger an increase in the prices of these services, specifically texting, at the worst possible time.

Because the P0.05 tax is imposed on each and every message regardless of the price of the message, it will kill off free messages as well as unlimited and bucket pricing offers.

Effectively 25% of all SMS handled by Globe are either free or effectively zero-rated under unlimited or other offers. Only 9% are rated at P1.00 per text.

The balance is priced on average at about only P0.23 per text. A new tax will make these low prices unsustainable.

Under some Globe promos a text may cost only 10-centavos or even less. Imposing a 5-centavo tax on a 10-centavo text is certainly oppressive and confiscatory thus unconstitutional.

“This is one of the worst anti-consumer legislation that, once implemented, will destroy the viability of these aggressive promos like free and unlimited SMS that benefit the public,” stressed Globe Chief Legal Counsel and Senior Advisor Atty. Rodolfo A. Salalima.

In the case of the SMART Group, 92% of its SMS traffic is generated out of bucket-priced plans. Bucket-priced SMS plans, which include the very popular unlimited SMS plans, are its SMS offerings for the masses.

The average price of these bucket-priced SMS traffic is effectively 11 centavos per SMS. The 5-centavo tax translates, therefore, into a whopping 45.5% tax per SMS.

Bucket-priced SMS plans, which benefit most low-income earners, operate on the basis of either unlimited SMS or a pre-defined number of SMS traffic over a defined time period.

These bucket-priced SMS plans now serve the basic communication needs of the country’s lowest income earners. SMS in this country, more than anywhere else in the world, has evolved into a basic and very affordable communication tool.

However, the tax on SMS will obliterate the bucket-priced SMS plans since the tax is imposed on each SMS. Consumers, therefore, can no longer expect to see bucket-priced plans including the very popular unlimited text plans if and when the SMS tax is imposed. SMS will revert to standard pricing which will not serve the needs of low income earners.

Furthermore, the installation of a “metering device or portal” which will interconnect the NTC, BIR and “other concerned agencies” with mobile phone service providers should be viewed with serious concern by all those in the private and public sectors.

While the “device” or “portal” is being pushed to keep mobile phone service providers honest tax-wise, this “device” or “portal” is actually in the nature of a “probe” which, given recent technology advancements, is powerful enough to retrieve and store messages and allow these messages to be viewed and read. All messages, therefore, can be read by “concerned agencies.”

The capability of this “metering device” or “portal” to allow messages to be stored, retrieved, viewed, and read sends a serious chilling effect on the constitutional right to privacy of every individual. The technological capability of these “probes” should be extensively examined and scrutinized since this capability can be abused.

“If the concern is to make sure that mobile phone service providers declare and pay correct taxes, there is already abundant monitoring being done today by the Bureau of Internal Revenue to ensure that taxes are properly declared and paid,” concluded Ray C. Espinosa PLDT Head for Regulatory Affairs and Policy Office.

The consolidated House Bill also imposes a 5-centavo tax on each overseas call made from the Philippines.

The proposed measure, a consolidation of house bills proposed by Congressman Danilo Suarez and Eric Singson, will impose a P0.05 tax on every text message, MMS, ringtone, icon and image.