Slashdot Mirror
Taxing Text Messages?
Makarand writes "SMS is a very popular way of communication in the Phillipines
with an estimated 14 million phone subscribers sending an average of 10 text
messages a day. However, that may all change if a proposal from the IMF to impose a tax
on SMS is implemented to solve the country's fiscal problems according
to an article
in The Straits Times. The IMF is basing
its suggestion on the fact that the country's tax base currently rests on
the troubled sectors of the economy- banking and manufacturing, which cannot
be squeezed anymore. Hopefully, our political think tanks will not get any such ideas."
In Europe, the telcos use SMS as a cash cow - it's unregulated (regulatory regimes were built in the age of analogue comms) and they rip you off. And it's already taxed (VAT) - it's time the companies charge a more realistic price (15 cents a text message is a typical price today).
Here, in Hungary (Europe), one SMS costs 12-15 cents (price converted to USD). This sum contains the base price + 25% tax (VAT).
The phone companies ARE using SMS's as cash-cows, since there's no way the infrastructure would justify this cost.
First off, it isn't the Phillipines that is coming up with this "new and unique way to find money", it is, as usual, the IMF. And if you actually read the article, you'd see that they expect a lot more than $51 million a year in tax income from this.
Who will suffer? The poor, of course. The IMF always asks governments to crack down on the poor, while sheltering the rich.
Unlike in Europe, where SMS is a cash cow for greedy telcoms, SMS in the Phillipines is free (or at least was until recently, I am not following very closely).
That may be true elesewhere, but not in the Phillippines. According to this article, text messages in the Phillipines are pervasive and cheap. They get pay per use cell phones for about $5.00 and can strech that to two months with 4 text messages/day (vs.
SONY. Because caucasians are just too damn tall.
The IMF financial solutions are not always ideal. Look at what happened to countries which actually implements its proposals. Most end up becoming worse before seeking IMF bailouts.
Indonesia didn't improve, Argentina's financial woes worsens, and S. Korea ended up pawning some of their biggest companies. Malaysia almost took up IMF's offer during the 97-98 financial crisis, but luckily the govt forsees the impact of some of the conditions... and Malaysia is recovering quite well if compared to other countries in S.E. Asia.
The Filipino govt should be able to decide what's best for the country's economic condition because they are more familiar with the economic factors involved.
I'm not saying taxation is a bad decision, but it shouldn't be at the expense of the population's financial well-being. Perhaps taxation of mobile phone sales and accesories would be more fair?
Just my $0.02's worth.
Welley Corporation - SLM Scammers
an SMS here costs PhP 1.00, or approx. 2 cents. Cheap compared to most countries.
Most people here are not in favor on puting tax on SMS because believe it or not, most of the SMS users are in the middle-class and below. It's because it's hard to get a land line here, and the cheapest way to get around it is to use SMS. Paying high bills is not a problem because most are using pre-paid systems.
I don't think it would push through because as of now, most of the law makers are againts it. And most are againts it not because we'll have to pay more, it's also because we're sick and tired of the dictations of the IMF.
Take-off every
is the surest (almost) way of communicating with someone. It is assured that the recepient will receive the SMS message and cannot ignore it. Unlike calling, wherein the recipient could just not answer the call. The quality of the service here is not that reliable for calling.
Most of the cellphone users here are pre-paid. We just buy $5.00 worth of credits that can be stretched for 2 months before expiration. Compared to post-paid users, the cheapest plan is between $10.00 - $12.00 per month. This includes 66 free text messages (if you send to the same network, outerwise you would be deducted $0.02 cents on your credit) every cycle, which is repeated every month. Therefore if the pre-paid subscriber can stretched his credit for two months he/she would have 132 free SMS messages. In the long run, if you are just using SMS, you can save a lot.
SMS messages here are not unlike IRCs (we Filipinos are just too fond of gossips =)). We abbreviate words, sentence, heck even entire phrases to send our message. T9 here just don't cut it. Even non-geek people here are at ease with using a cellphone, they may not know how to use email but they can sure type out messages in almost most cryptic, IRC style SMS messages.
I for one does not approve of the meddling of the IMF in the internal affairs of my country. But I will approved the increase taxation of sin products.
Actually the number one priority for the IMF is to make sure debts are paid. What normally happens is that there is a recession or some kind of financial crises regarding monetry policy (and in many cases caused by previous IMF policies such as currency pegs) or both.
The problem for these countries is that the IMF most of the time just goes in and raises taxes. Now if you are in a recession raising taxes is not going to encourage growth in fact the opposite, so you get into this downward spiral where you get less in tax revenue as a recession deepens therefore needing you to increase taxes even more.. eventually it all f'ks up and you end up calling in... yeap the IMF, whos cure is to increase the debt burden into order to pay debts.
You see the IMF will not lend you money in order to grow the economy, they lend in order to roll over debt. It is the World Bank that lends in order for growth.
The IMF gets called in since if the country does n't the interest rates they pay for money borrowed on the international markets rocket. It's kind of like a guarentee for lenders. If you don't play by the rules you end up like Argentina, which ironically until recently was an IMF "Success story".
The whole world economic system is based on debt and default means financial ruin. The IMF is there to make sure debts get paid regardless of the social costs. The problem is for every IMF success there are 10 other failures.
Of course it's not this simple, there are other factors such as politcal stability, corruption, external factors such as currency speculation, etc etc.. but the IMF "debt police" are always at hand to swoop in.
The parent has no idea what he's talking about.
As an ex-pat living in the Philippines... Text messaging is rediculously cheap here (US$5 does me 3 months easy), and pretty much everyone uses pre-paid scratch cards to pay for their phone use. However landline phones are rediculously expensive, at about US$20/month - a lot in a poor country. That's why most people use SMS to communicate - it's all they can afford.
It's typical of the IMF to suggest squeezing the poor for more revenue - while the politicians sit back and take untaxed bribes. Heck, you can even bribe officials at the tax department to accept your dodgy tax return. Maybe if they eliminated some of the corruption the tax take would be higher.
International pirates.
They come up with some grand scheme to help a 3rd world country, and loan them a bunch of money for a dam, a power plant, etc, etc. It fails miserably.
Now the country has to pay this mega project off, plus their original debt. If the country looks like it will default on their payments, the IMF comes in and says, "We'll prop you up, but we need to be in control." The IMF then gets farmers to change from food to cash crops, cuts off any semblence of workers benefits, etc.
For example, in Equador, "...the IMF's 167 loan conditions look less like an assistance plan and more like a blueprint for a financial coup d'etat"
As Bruce Cockburn sings, "IMF / dirty enough / takes away anything it can get / always certain that theres one thing left / keep them on the ropes with unsupportable debt..."