Smart, Piltel to absorb VAT rate hike

Smart Communications and Pilipino Mobile Telephone Corp. (Piltel) assured the public yesterday that they would not pass on to their customers the increase in the rate of the value-added tax (VAT) expected to be passed by Congress.

Officials of the two cellular phone operators said they would absorb the additional taxes and not pass on the new tax rates to their customers even though the VAT law authorizes business firms to make their consumers shoulder the VAT taxes on their purchased products.

Atty. Roger Quevedo, head of Smart’s legal and carrier business, said that Smart "is willing to sacrifice its profits for the sake of our customers‚ welfare and for the sake of the country’s economic growth."

"This is our contribution to our country to help in its economic recovery, stability and progress. Smart and Piltel are responsible corporate citizens ready to stand up for the country in times of challenge," he stressed.

Opponents of the bill seeking to increase the VAT from 10 percent to 12 percent have warned that if passed into law the legislation would cause more inflation as business firms would merely pass on the additional VAT to their consumers.

Smart and Piltel official said that in their case this would not happen as they are prepared to shoulder the additional taxes to protect their customers‚ welfare and also to help the country cope with its budgetary deficit through an increase in government revenue.

Meanwhile, the Philippine Long-Distance Telephone Co. (PLDT) said it planned to make permanent its P10-per-call promo to allow more than two million PLDT landline subscribers to call other PLDT subscribers nationwide as well as the 20 million Smart and Talk N Text subscribers for a flat rate of only P10 per call instead of the usual per minute rate.

Calls from PLDT landlines to Globe cell phones would remain at P13.75 per minute.

The promo was first launched last Feb. 14. Regulators have allowed PLDT to extend the implementation of the pricing scheme for 30 days until April 1. But PLDT retail business group head Butch Jimenez said the company planned to extend the promo until June 11 and make it permanent thereafter.

"With the market’s strong positive reaction to the offer, we are thinking of making this a permanent plan. The public likes the product’s simplicity and affordable price," Jimenez said.

PLDT used to average 100,000 calls per day to NDD or Smart and Talk ‘N Text cell phones. Less than three weeks after the promo, the number of callers jumped to 146,000 per day. The total number of calls also grew significantly from 390,000 calls per day to 540,000 calls per day during the same period, Jimenez disclosed.

Because of the promo, cities outside of Metro Manila have petitioned PLDT to extend their services to their cities to make their telecommunications services more widespread nationwide.

"The big advantage of the P10-per-call promo of PLDT is that it is open to the 10 million subscribers of Smart and Talk N Text plus the two million landline subscribers of PLDT. That’s 22 million reasons why the competition cannot come close to what PLDT can offer its subscribers," Jimenez said.