'Tax and text'

The suggestion to impose an additional five-centavo tax on every text message is simply unacceptable because it will be an added burden to the 70 million cellphone users in this country, majority of whom are pre-paid subscribers. Meaning, most of these subscribers belong to the middle and lower segments of society who can only afford miniscule amounts for their phone load credits like P10, P15 or P30. Aside from pro-poor groups, OFWs are also up in arms because they will also be affected by the proposed bill which imposes an additional tax on every overseas communication made from the Philippines. Texting is undoubtedly one of the fastest and most popular means for overseas workers to communicate with the families they left behind – and this additional burden will greatly limit the ability of Filipinos to stay in touch with their relatives and loved ones working abroad.

Even telecoms companies themselves admit that the proposed House Bill would be oppressive particularly to the poor who are heavy text users since texting is more affordable compared to voice calls. While the Philippines may have one of the highest so-called access costs in Asia, telcos have been providing “bucket pricing” schemes in efforts to bring down the cost of text messaging. Bucket-priced text plans are specifically designed for the “masa” since they provide either unlimited text or a pre-defined number of text messages over a defined time period at very low rates, like a P10 “unli” (short for “unlimited”) plan which allows a pre-paid subscriber to send as many as 30 text messages plus a certain number of voice call minutes within a day. Imposing this text tax will be tantamount to obliterating these bucket-priced plans because the five-centavo tax will be imposed on every text message sent by subscribers. If this happens – telcos will be forced to revert to standard pricing – which means goodbye to masa-friendly schemes especially the “unli” promos. Clearly, this is an anti-poor and anti-consumer proposal.

Senate president Juan Ponce Enrile has categorically said that this proposal would not pass in the Senate – and the only time this would be acceptable is if the burden of paying for the additional tax would not be passed on to consumers. The senator is proposing the reduction of the current one peso rate per text (within the same telco) to 80 centavos. Even with a 10-percent government tax, telcos still stand to earn 72 centavos per text message, which means telcos would not be losing a lot because they can earn from the heavier volume of messages, Enrile explained.

While Malacañang has initially been supportive of the proposal, it has since cautioned the bill proponents to go slow on the tax-on-text measure since this is being seen as an anti-poor legislation which could (as one Palace spokesman correctly pointed out) create a political issue and even send the wrong signal to investors. Worse, this issue could trigger a class war, with pro-poor groups already feeling resentful at the fact that government – or at least those who are pushing for this bill – seems bent on increasing revenues at the expense of the poor. Congressmen have been sitting on a bill amending excise taxes on alcohol and tobacco products – the so called “sin taxes” – yet there seems to be undue haste in passing the text tax. Government stands to earn an additional P20 billion annually from the proposed five-centavo tax on text, but the amount could be higher considering that the Philippines has the distinction of being the texting capital of the world with an average of one to two billion text messages sent every day.

Of course, critics are insinuating that this is another scheme for government to add to its election war chest. The timing is also off considering the latest report from the National Statistics Office that the unemployment rate has gone higher to 7.6 percent or close to three million Filipinos who are jobless. What people also find objectionable is the rationale given by Congressman Danilo Suarez – the bill’s main proponent – that the additional P20 billion will be used to support a nationwide computer literacy program for public schools. Which is rather ironic because the supposed beneficiaries are the poor – but the money needed for this program will be taken right from their pockets. This would be, as Filipinos describe it, “ginigisa sa sariling mantika.”

Instead of cooking up an unpopular bill, Congressmen should concentrate on increasing the taxpayer base of this country to increase government revenues for more efficient delivery of basic services. Joker Arroyo hit the nail right on the head when he called on presidential candidates to stop trying to outdo each other with surveys (which are obviously commissioned by their respective camps and skewed to make the candidate appear winnable) and start talking more about what they plan to do on pressing problems and issues like reproductive health. We’ve said it before and we’ll say it again – population growth and poverty are interrelated problems that impact our economy and affect government’s ability to deliver basic services especially to the poor. After all, of what use is democracy when there is no food on the table?

One of the big problems affecting a majority of the poor is education, which is supposed to be a basic right for every Filipino. Yet every year, there is never enough money for books, teachers’ salaries, facilities and school buildings. For many Filipinos, education is the only way out of poverty. Instead of thinking about taxing the poor with their text, legislators should first look on legislation – such as the reproductive health bill – which has the potential to help alleviate poverty in this country.

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