Press Release
January 10, 2008

Tax on texting is additional burden to the poor, says Villar

Senate President Manny Villar today said tax on text messages will be an additional burden on the shoulders of poor Filipinos as he shot down the proposal to impose tax on the short messaging service (SMS) of cellphone subscribers.

"This proposal defeats the purpose of protecting the public from the ill effects of the spiraling cost of oil products as it entails additional burden to the people. Instead of passing additional burden to consumers, government must double on its efforts to improve tax collection," Villar said.

The Nacionalista Party President said government officials should come up with 'solid proposals' on raising revenues and refrain from 'floating trial balloons' such as the one on the text tax, which has drawn fire from the public despite the fact that it has not been officially proposed by Malacañang to Congress.

On Wednesday, Trade and Industry Secretary Peter Favila proposed that additional taxes be imposed on SMS to raise government revenues that could be used as subsidies to other industries hurt by the increasing prices of oil.

"The proposal seems to be half-baked because it doesn't take into consideration certain marketing developments in the 'talk and text' business," he said.

"For example, how can you tax messages sent from unlimited text packages which are being sold by all phone companies?" he said.

"If the old proposal was to levy a certain amount of tax on every text message sent, then how can you count and assess text messages sent from products which allow the user to dispatch unlimited number of text messages within a given period?" Villar said.

Villar said text messages are now covered by the 12 percent VAT and the service providers , all telecoms giants, are slapped a 35 percent corporate tax on profits .

The Senate President said government should be more sensitive to the needs of the majority and the reality that people are suffering from tax fatigue.

"They have been subjected to several round of new taxes, from sin tax to VAT, so the national mood is against new taxes," he said.

"If the Palace phones us to pitch a text tax, they'll get a busy tone," he said.

Villar also took a dig on tax text proponents as they are marketing the proposed measure as simply a revenue raising strategy without saying where the proceeds will be spent specifically.

"If ever it proposes a new tax, the government should specify where the yield will go, so it can at least get a fair hearing in Congress," he said.

"Government has been remiss in its duty to earmark part of VAT and sin tax proceeds for social services, which the law requires," Villar said.

Villar also cautioned Malacañang against supporting this proposal as it can be viewed as a design to stop the use of cellphone in spreading text messages critical to the administration.

"Filipinos have depended on texting as an efficient and cheap means of communication. Texting has become an integral part in strengthening relations among families and friends. In our daily routines, this technology has allowed us to accomplish more. A tax on this service means subscribers will have to pay more," Villar said.

SMS or text messaging is very popular in the Philippines, the texting capital of the world. The country has an estimated 50 million cellphone users generating a traffic of over 300 million text messages a day.

News Latest News Feed