Olongapo SubicBay BatangGapo Newscenter

Sunday, October 30, 2005

Gordon to govt: Tax text messaging, not basic needs

By Efren L. Danao, Manita Times Senior Reporter

SEN. Richard Gordon proposed on Saturday to tax text messaging instead of imposing a value-added tax (VAT) on power, liquefied petroleum gas and processed food.

He said the government should not add to the people’s burden by collecting VAT on their most basic needs.

A reformed value-added tax (R-VAT) will be in effect starting November 1 following the lifting by the Supreme Court of its restraining order on the implementation of the expanded value-added tax law.

There are now many proposals to amend the law even before it could be implemented. Among the proposed amendments is the exemption of power, fuel and processed food from its coverage.

Gordon said that taxing text messaging is a compromise formula that answers the problem of generating revenue for the government without passing on additional tariff to processed food and LPG.

He noted that 200 million text messages are sent out daily in the Philippines.

“We can generate P73 billion a year in revenue if we tax each message sent with P1,” he said.

Gordon said the P73-billion projected income would be enough to compensate for the shortfall arising from a tax exemption on power, LPG and processed food.

“With tax on text messages instead of on fuel and power, we can not only fill in the needed revenue of the government but also provide for the needs of the people, build schools, buy textbooks, develop healthcare programs and boost tourism and trade to create job opportunities,” he stressed.

There had been previous proposals to tax text messages but these were withdrawn after they were met with vigorous objections by text-crazy consumers.

Gordon said there is more sense in taxing text messages than basic needs.

“Text messages are not needs but merely ‘wants’ that we can control and live without,” he remarked


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