Thursday, August 12, 2004 Tomas backs tax on texting
AMID strong opposition from the public against moves to tax text messaging services, Cebu City Mayor Tomas Osmeña expressed his support for the “reasonable” proposed measure.
Osmeña also criticized House Speaker Jose de Venecia for taking back his original pronouncement to tax short messaging service (SMS).
“Speaker de Venecia has no political backbone. I don’t see anything wrong with taxing text messages. It’s a very reasonable source of income for the government. You want us to tax food instead?” the mayor told a news conference yesterday.
Cebu City Planning Officer Nigel Paul Villarete is also supportive of the move.
In a separate interview, Villarete said he believes the telecommunications companies will not pass on to consumers the tax that will be imposed on SMS.
He added that he agrees with the tax on text messaging because unlike basic commodities, SMS is not a service that is vital to the people.
“So many people want to text and these telecom companies have so much profit already that they won’t have to increase the price of text messages,” he said.
Speaker Jose de Venecia, however, has announced that Congress will not pass a law to tax text messaging services.
Still, the Association of Concerned Texters (ACT) in Cebu will continue lobbying against any form of taxation on mobile phone firms, for fear it will be passed on to subscribers.
Passing on
ACT president Susan Gesulga said they have to wait and see if the government will make good its promise to ensure that cell phone users will not be burdened with an additional tax.
A day after a Manila-based texters’ group bombarded de Venecia with text messages expressing their opposition to the new tax, the speaker announced that Congress will only increase the franchise taxes imposed on telecommunication firms, not impose new ones on cell phone users.
“We’re still at a disadvantage because the taxes will be passed on to us,” Gesulga said.
Jerry Intig, Visayas-Mindanao external affairs and public relations head of Globe Telecom, admitted that any form of tax will affect their millions of subscribers.
“Globe will do everything to protect its subscribers. (But) As a good corporate citizen, we don’t have any other recourse but to comply if the government will implement it,” he said yesterday.
De Venecia assured that the proposed measure will include a provision that will prohibit companies from passing on the franchise tax to subscribers.
He also noted the huge profits the phone firms are making and said that the franchise tax will be imposed in lieu of the value-added tax (VAT).
2 taxes
The 10-percent VAT and the 10-percent overseas communication tax are the two taxes presently charged to every pre-paid and post-paid subscriber.
However, Intig said the issues on the taxation of text messaging services and the payment of franchise taxes are still subject to debates.
Intig said that since they will still have to “study the mechanics” of the proposed legislation on the increase in franchise tax and decide if they would pass it on to their subscribers.
Sun.Star tried to reach Ramon Isberto of Smart Communications but was told he was unavailable for comment.
Earlier, the Cebu City Government tried to collect franchise taxes from Smart and Globe since the Local Government Code empowers cities and provinces to collect as franchise tax three-fourths of one percent of a utility company’s annual gross income.
However, both firms refused to pay it since they already paid the National Government.
But Globe later paid the City Government a “compromise fee” of P35 million.
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