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Philippine Congress to Tax Text Messages?

(Philippine Star, 08/19/2009, Jess Diaz) MANILA, Philippines - There is a consensus in the committee on ways and means of the House of Representatives to tax millions of senders of text messages, Quezon Rep. Danilo Suarez said yesterday.
“It’s almost sure: They will go for the tax on text instead of increasing the tax rates on cigarettes and liquor,” he told The STAR.

“I think it’s unfair. If we have to text texters or text senders, we have to tax smokers and drinkers,” he said.

Suarez is the proponent of a five-centavo text tax and an increase in taxes on cigarettes and liquor, or the so-called sin products.

He is the congressman who admitted paying $15,000 for steaks and lobsters that President Arroyo and her large entourage enjoyed in Washington DC two weeks ago.
He has boasted that it is his habit to treat the Arroyos and their companions to expensive dinners whenever he is with them abroad.

According to The STAR columnist Jarius Bondoc, Suarez is rushing the Development Bank of the Philippines to grant a P1-billion loan to a company owned by his sister, his sons and other relatives.

Another member of the presidential entourage, Leyte Rep. Martin Romualdez, reportedly paid $20,000 for caviar, escargot, expensive wine, soft shell crab, and steaks at New York City’s Le Cirque, a French restaurant.

Ilocos Sur Rep. Eric Singson and other Northern Luzon congressmen are blocking the proposed increase in sin taxes, claiming it could wipe out the tobacco industry in their region.

Instead of higher sin taxes, Singson has filed a separate bill proposing a five-centavo text tax.

Antique Rep. Exequiel Javier, ways and means committee chairman, has expressed opposition to higher sin taxes despite President Arroyo’s appeal for the House to adjust sin tax rates.

Suarez said he would present a compromise to the committee: impose a text tax of three centavos, instead of five, and at the same time adjust sin taxes.
He said this would make the distribution of the tax burden more equitable.
According to mobile phone service providers, there are now over 70 million Filipinos using cellular phones.

In her State of the Nation Address last July 27, President Arroyo advocated an increase in cigarette and liquor taxes.

“Taxes should come from alcohol and tobacco and not from books. Tax hazards to lungs and livers, do not tax minds,” she said.

Taking the cue from the President, Speaker Prospero Nograles said the House of Representatives, where all tax measures must originate, would “seriously consider proposals seeking to restructure the excise taxes on sin products and the metering of telecommunications companies.”

“These bills are projected to generate at least P25 billion in additional revenues,” he said.

He said the additional tax money would reduce this year’s projected budget deficit of at least P250 billion.

According to former Finance Undersecretary Milwida Guevarra, the President’s advocacy of higher sin taxes was just “lip service.”

“She has been against higher sin taxes. She even reject DOF proposals for higher rates after meeting with manufacturers at her Forbes Park (Makati) home,” she told ABS-CBN News Channel in a recent interview.

She said new measures to increase rates have been pending in the House since last year and the President could have pushed for their approval by her allies had she been serious in generating additional revenues from sin products.

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