House panel backtracks, reconsiders text tax measure
JOHANNA CAMILLE SISANTE, GMANews.TV
09/22/2009 | 12:38 PM
Public uproar has forced the House committee on Ways and Means on Tuesday to reconsider its approval of a measure proposing a five-centavo tax on text messages and other mobile phone services.
The committee put back on the table the consolidated bill it approved last September 8, upon the motion of Cagayan de Oro Rep. Rufus Rodriguez, who said the bill should be reconsidered "for the purpose of more public hearings."
The bill, authored by Quezon Rep. Danilo Suarez, Ilocos Sur Rep. Eric Singson, and committee chair and Antique Rep. Exequiel Javier, proposes to impose "a specific tax equivalent to five centavos for every overseas dispatch, message, or conversation transmitted from the Philippines by telephone, telegraph, telewriter exchange, and other communication equipment services which shall be paid by the service provider."
The possibility of the tax resulting in higher text messaging costs have triggered protests from consumer groups.
According to Rep. Javier, the bill was being reconsidered because "some groups [complained] they were not heard." He also said the committee will try to come up with a "scheme" that will ensure that the tax will not be passed on to consumers.
Rodolfo Salalima, Globe Telecommunications chief legal counsel, reiterated his firm's stance that prohibiting telecommunication companies (telcos) to pass on excise tax to consumers could lead to "serious constitutional issues."
"The general law of the land is to the effect that all taxes except income tax are passable to the public," Salalima said during the hearing. He also maintained that telcos cannot shoulder the five-centavo tax, claiming that their profit per text message - which he said costs 23 centavos on the average - is only two centavos.
Salalima branded the consolidated bill as the "worst anti-consumer legislation ever produced by Congress."
TXTPower group head Antony Ian Cruz said the five-centavo tax "is not a tax on telcos."
"This is a tax against consumers," Cruz said during the hearing.
Instead of taxing text and other mobile phone services to generate revenues that will be allocated to education, the government should just source additional budget for schools from the budget for debt service and the President's discretionary funds, Cruz said.
Ronnie Buenviaje, a director at the Department of Finance, said that excise tax can be passed on to the public, adding that the supposed “no pass-on provision" that lawmakers want to put in the bill "is one of the concerns" of the DOF.
"It's up to the telcos to abide by it, by this provision, or otherwise go to court, question said provision enacted by Congress," Buenviaje said.
"We would like to see how the no pass-on provision could be effectively implemented," he added. - GMANews.TV
The committee put back on the table the consolidated bill it approved last September 8, upon the motion of Cagayan de Oro Rep. Rufus Rodriguez, who said the bill should be reconsidered "for the purpose of more public hearings."
The bill, authored by Quezon Rep. Danilo Suarez, Ilocos Sur Rep. Eric Singson, and committee chair and Antique Rep. Exequiel Javier, proposes to impose "a specific tax equivalent to five centavos for every overseas dispatch, message, or conversation transmitted from the Philippines by telephone, telegraph, telewriter exchange, and other communication equipment services which shall be paid by the service provider."
The possibility of the tax resulting in higher text messaging costs have triggered protests from consumer groups.
According to Rep. Javier, the bill was being reconsidered because "some groups [complained] they were not heard." He also said the committee will try to come up with a "scheme" that will ensure that the tax will not be passed on to consumers.
Rodolfo Salalima, Globe Telecommunications chief legal counsel, reiterated his firm's stance that prohibiting telecommunication companies (telcos) to pass on excise tax to consumers could lead to "serious constitutional issues."
"The general law of the land is to the effect that all taxes except income tax are passable to the public," Salalima said during the hearing. He also maintained that telcos cannot shoulder the five-centavo tax, claiming that their profit per text message - which he said costs 23 centavos on the average - is only two centavos.
Salalima branded the consolidated bill as the "worst anti-consumer legislation ever produced by Congress."
TXTPower group head Antony Ian Cruz said the five-centavo tax "is not a tax on telcos."
"This is a tax against consumers," Cruz said during the hearing.
Instead of taxing text and other mobile phone services to generate revenues that will be allocated to education, the government should just source additional budget for schools from the budget for debt service and the President's discretionary funds, Cruz said.
Ronnie Buenviaje, a director at the Department of Finance, said that excise tax can be passed on to the public, adding that the supposed “no pass-on provision" that lawmakers want to put in the bill "is one of the concerns" of the DOF.
"It's up to the telcos to abide by it, by this provision, or otherwise go to court, question said provision enacted by Congress," Buenviaje said.
"We would like to see how the no pass-on provision could be effectively implemented," he added. - GMANews.TV
