Taxing the text

The estimate is about P42.2 billion every year.

That is what the national govern ment, based on calculations by the National Tax Research Center, projects to generate if every text message sent were taxed 50 centavos.

The substantial amount is not surprising. The Philippines, after all, has been tagged as the SMS (short  messaging system) capital of the world for being the country whose people send the most number of text messages everyday.

But the high number of text messages exchanged hereabouts does not in any way change the very nature of this good – that it is a telecommunication tool. Not a luxury. Not a sin product.

Texting, although widely used and perhaps indeed somehow an addiction for some Filipinos, is not in the league of cigarettes and alcoholic drinks, products listed under Republic Act 9334 or the Sin Tax Law of 2005.

The Department of Finance is lamenting that the Sin Tax Law, which outlines an increase on the excise tax of cigarettes and alcohol every two years until 2011, is flawed because the increases are not really commensurate to the increase in market prices, among other reasons.

Furthermore, the government’s sin tax collection actually declined in 2007 to P29.8 billion from P30.5 in 2006, which is most likely one of the reasons why officials now feel hard-pressed to look elsewhere for generating funds.

And that makes for a very lame excuse for taxing text messages, that good which is probably now the cheapest form of entertainment – it used to be going to the cinema, but even that has become too expensive now – for many a Filipino.

The government should be looking elsewhere. In places that will draw in something more justified and significant than P42.2 billion that will actually just affect the poor more than the rich. The government, by imposing a tax on text, will only make enemies of the majority of the people.

Our officials can learn a lesson or two from Undersecretary for Local Governance Antonio Villar Jr., currently at the helm of the Presidential Anti-Smuggling Group, who is hell-bent on collecting for the government the real customs taxes it is rightfully entitled to.

He is making a lot of enemies in his mission. But those would be the enemies worth making.

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