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JAIME
Augusto Zobel de Ayala II, chairman of the country’s
oldest conglomerate Ayala Corp., is strongly objecting
the proposals of some lawmakers to impose new levies on
telecommunication companies, saying the sector is
already heavily taxed.
“I’m
against it because telcos have been one of the most
taxed in the Philippines,” he said before the
participants of the Seventh International CEO
Conference. Ayala controls Globe Telecom, the
second-largest phone firm in the country.
From the
current taxes, he said the government already gets a
good chunk of income.
“Globe
and its competitors, meanwhile, continue to invest on
infrastructure and technology to be at par with
counterparts abroad,” he added.
Senator
Richard Gordon has drafted Senate Bill 2402, which
proposes that one-half the cost of every text message
sent be allocated to a special fund to address the
country’s backlog in education and health
infrastructure.
At the
Lower House, Speaker Prospero Nograles supported the
senator’s move saying the said piece will encourage
people to text for a cause.
The
finance department, meanwhile, welcomed the plan of the
lawmakers, as this would help the government raise
additional funds for social services.
For its
part, Globe Telecom strongly opposed the said measure,
saying this is discriminatory, unconstitutional and
anticonsumer.
Globe
chief legal counsel Rodolfo Salalima said there is no
legal or factual basis for Senate Bill 2402.
First,
he pointed out, there are only three essential powers of
government. These are police power, power of eminent
domain, and power of taxation. Sen. Richard Gordon’s
bill, said Salalima, is an exercise of the tax power in
disguise.
“We
believe that SB 2402 is another way of imposing an
excise tax or ‘sin tax’ on telecommunication services,
in general, and SMS (short message service), in
particular. The imposition simply adds fire to the
belief that the reason for this selective and
confiscatory tax is simply due to the immense popularity
of SMS and the misperceived huge revenues of the CMTS
(cellular mobile telephone system) providers from the
service, which in the first place, should be viewed in
relation to the billions of pesos of capital and
operational assets and costs of these providers,” said
Salalima.
SB 2402,
said the Globe official, must first be initiated and
introduced in the House of Representatives in order to
be constitutionally valid.
Globe,
he pointed out, has been offering text service at
a cost much less than P1. Thus, Globe’s blended or
average cost per text is only about 27 centavos. Of
this, the company has to deduct from the 27 centavos the
cost to serve, trader’s commission and the 12-percent
value added tax to arrive at a very miniscule margin due
Globe.
Globe
had already lowered the SMS rates last July by offering
an intra-network pricing scheme of P0.50 per SMS sent to
other networks. This was already on top of the bucket
pricing and unlimited SMS promotions currently offered
intra-network, with price ranges from P0.10 to P0.30 per
text sent.
And
because SB 2402 increases SMS pricing, it will be the
consumers who will ultimately bear the burden imposed by
proposed measure.
“Any
proposal stating that the P0.50 imposed by SB 2402 will
be borne exclusively by the CMTS providers simply does
not wash. As SB 2402 is a revenue measure, the same
becomes an added cost or factor of production which by
its nature can be shifted by the provider to the
consumers nevertheless – this is basic economics.
Salalima
said the SB 2402 will only send the wrong message to
actual and potential investors and “will paint, in a
manner more pronounced and strongly, the government’s
policy-making as ever fluctuating, flip-flopping,
unpredictable and capricious at best- the reason why the
Philippines lag far behind worldwide in terms of
business competitiveness.” |
