Lawmaker gives up on text tax

MANILA, Philippines - The principal proponent of a tax on billions of text messages Filipinos send every day has finally raised the white flag.

Danilo Suarez, who won his third and last term as representative of Quezon’s third district in the May 10 elections, said yesterday he would no longer file his text tax bill in the incoming 15th Congress, which convenes on July 26.

His proposal did not even get past the committee level in the outgoing House of Representatives, where, under the Constitution, tax measures must originate.

Suarez said it would be a waste of time and effort to resurrect his bill in the next Congress since president-elect Benigno “Noynoy” Aquino III has frowned upon proposals to impose new taxes or raise existing rates.

He said he hoped an influential ally of Aquino would revive the proposal since it could be one of the easiest ways to raise revenues to plug the huge budget deficit that the incoming administration would inherit from President Arroyo.

It is also a way of taxing the windfall profits of telecommunications companies that amount to tens of billions of pesos, he said.

It could likewise discourage people from wasting their money on unnecessary text messages, he added.

Suarez’s original proposal called for the imposition of a 10-centavo text tax, which was later reduced to five centavos. He estimated that at 10 centavos, the government would be collecting an additional P72 billion a year from mobile phone service providers.

The Quezon congressman, a staunch ally of Mrs. Arroyo, would likely be part of the minority in the incoming House, together with the outgoing president. He has a term-sharing agreement with Albay Rep. Edcel Lagman as House speaker or minority leader.

While abandoning his text tax bill, Suarez insisted on his proposal for the government to meter or monitor through a metering device the cellular phone business of telecommunications companies, which he described as a “gold mine.”

At present, he said the National Telecommunications Commission (NTC) and the Bureau of Internal Revenue (BIR) have no way of checking the veracity of income reports that these companies submit every year to the BIR for tax purposes.

He expressed doubt whether these firms make accurate income reports.

He said the metering device could monitor all mobile phone services, including text messages and voice calls.

He said the incoming Aquino government should procure the device as soon as possible. He reckoned that it would cost about $15 million.

Suarez, knowing that his House colleagues would just junk his text tax and mobile phone service metering proposals, actually wanted the NTC to impose the levy and install the metering device.

But NTC officials told him that these would require legislation and that telecommunications companies would surely bring them to court if they adopted his suggestions.

They said these firms are always inexplicably able to get the courts to issue temporary restraining orders against them.

Recently, these companies got the Court of Appeals to restrain NTC from enforcing its order for them to base voice call billings on a per-six-second instead of per-minute basis.

The NTC order was based on the recommendation of Senate President Juan Ponce Enrile who, weeks before the May 10 elections, raised hell on disappearing cell phone loads, frequent dropped calls and per-minute billings for voice calls, even if a call lasts only a fraction of a minute.

According to Enrile, the worldwide practice, particularly in rich countries like the United States, is to bill customers on a per-six-second basis, which makes voice calls cheaper.

His victory in the May 10 elections was due in part to his campaign before the polls to make cell phone service less costly for the more than 50 million Filipinos using mobile phones.

His television advertisement message “Gusto Ko, Happy Ka” was taken from that campaign.