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."

Comments

SMS pricing

[00_NOP]

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).

Re:What's the problem?

[perrin]

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).

Re:Tax on the stupid?

[murphj]

So, given the demographic that seems to like "texting", isn't this like lotteries ie. a tax on stupid people? It seems to me to be only interesting to people for which email is some sort of "novelty".

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. .5 hours talk time).

Take IMF "Solutions" with a Pinch of Salt

[MoThugz]

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.