Senate President Juan Ponce Enrile said he would only agree to the proposal to impose a five-centavo excise tax on text messages only if the telecommunication companies would reduce their current rates as a way to ensure that the additional burden will not be shouldered by consumers.
Enrile said there was no way the proposed House measure could guarantee that the tax burden will not be passed on to consumers, despite the so-called "no pass-on" provision allegedly contained in the House bill.
"My proposal, which I broached during the last Legislative-Executive Development Advisory Council (LEDAC) in Malacañang, was for the telcos to first reduce their current rates before any text tax can be imposed so that we guarantee that the tax burden will not fall on the shoulders of consumers," Enrile said.
"For example, the current P1 per text rate can be reduced to 80 centavos and government can get a 10 percent tax on that rate. That way, after the tax, telcos still collect 72 centavos per text message. It will be fair because it ensures that the tax burden will not be passed on to the consumers," Enrile added.
He said imposing an additional five-centavo tax on top of the present rate of P1 per text message was "not warranted," noting that the measure approved by the House Ways and Means Committee last Tuesday would result in an "indirect tax on consumers."
Enrile said he doubted if the House measure as it is would be passed in the Senate. "I myself will vote against it if the interest of the texting public will be prejudiced," he said.
Enrile explained that his proposal would not result in huge profit losses to telcos since the reduction of the rates would definitely mean a substantial increase in the volume of text messaging. "Their volume of sales will definitely increase once they reduce their rates because people will be sending more text messages," Enrile said.
Enrile said he agreed with the proposition that an excise text tax will help increase government revenues to finance a comprehensive computer literacy program in public schools.
However, Enrile said he would oppose any new taxes without giving commensurate relief to the public since the people were already having a hard time coping with the current economic difficulties.
"Government must find creative ways to spur the economy apart from burdening the public with additional impositions. Allowing the people to keep their savings and spending them would definitely prompt more economic activities," he explained.
The Senate President also expressed concern over the cost to be incurred by the government in a metering system to monitor the text messaging sales of telcos.
"The metering system may be good in principle but will it be financially feasible considering the high costs of the metering machines?" Enrile asked.
At the same time, Enrile echoed the concern raised by Cagayan de Oro Rep. Rufus Rodriguez that metering system could violate the Filipino's right to privacy.
Enrile noted that House Bill 262 seeks to install a "metering device to directly link the Bureau of Internal Revenue (BIR), National Telecommunications Commission (NTC), and telecommunications companies to be able to capture all the revenues by mobile telecommunications companies in their database..."
Enrile said this provision could pave the way for government agencies to pry on text messages transmitted by cell phone users. "I share the concern that this metering system could clash with the people's right to privacy of communication as it could be open to abuse," Enrile said.
The Senate President said his objection against text tax was consistent with his advocacy against the burdensome royalty on indigenous sources of energy such as natural gas which translates to very high generation costs as essentially borne by the consumers.
He said reducing the royalty taxes would allow Filipino households enjoy lower electricity rates and after all, natural gas is a natural resource owned by the people and should therefore benefit the public at the least cost to them.