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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).
14 million subscribers sending 10 messages a day is 140 million messages. If the tax worked out to 1/10th of a cent on each message, the total cost to the user would be 1 penny each day - certainly not an unmanagable amount. That works out to $140,000 a day - or $51.1 million a year. That's a sizeable amount of cash. This is one of those cases where the effect to the consumer is nearly nil, but the economic benefits to the country are quite large. We should be congratulating the Phillipines for finding a new and unique way to find money in an economically unstable region, rather than criticize. It certainly beats putting huge amounts of tax on addictive or necessary products such as cigarettes and gasoline like we do here in North America, which I've always thought of as really sneaky and low.
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.
... charging a tax of 2 cent for every spam mail sent
Bear in mind that the IMF are only brought in when the country is seriously screwed with it's economy already. When they are "advising" the government, they will take whatever steps are necesssary to get the country back on track rather than falling further into financial ruin. They often will take sometimes drastic measures and it is expected it is going to be a tough 5 to 10 years for the countries population. At least in this case, taxing SMS messages, which already happens in a number of countries (I'm taxed 2.5c (Euro cent) per text message which is tax at 21%) . This issue is not one to get into a twist over.
Aren't SMS already taxed? You pay for each SMS message, it shows up on your phonebill, and then the government adds salestax or value added tax. End of story.
I assume that phone companies pay taxes there, like every other businesses....
J.
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".
... and with the baffling popularity of "texting", this trend looks set to continue into a new century.
Text messages are *ridiculously* expensive already, for what you get. Think about the cost per byte that they are charging people! I'd be prepared to pay a very small flat monthly fee to send as many messages as I like. Any thing else is simply price gouging.
Not to mention that they take too long to compose. It amuses me to watch Joe Average compose one of these things. In the time it took to compose the message and send it, they could have called the recepient 10 times already, and sorted out whatever it was in 30 seconds, or left a message at the speed at which they can speak.
Still, no one ever underestimated the intelligence and taste of the general public
The price of a bullet, damn that's cheap! Here in the good ole US of A they take half of everything you own.
The IMF is a vehicle for implementing a policy that is designed to make poor nations poorer, and the US based financial world richer.
The IMF has a standard approach of privatization, deregularization, more taxes and less government spending. In practice, state assets are sold off to foreign investors, and capitals markets are deregulated to open the gates for speculation. At some point the price of basic living (cooking, heating, taxes) is raised, causing massive civil unrest, and collapse of the economy. In the ensuing turmoil, foreign corporations can buy the remaining assets of a country at garage-sale prices.
Don't take my word for it. Read about Joseph Stiglitz (Nobel laureate, former IMF economist and former director of the worldbank)
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salon
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The Observer
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The new republic online.
Or name a country where IMF intervention did work: (it failed in Indonesia, Thailand, Russia, Brazil and Argentina)Han-Wen Nienhuys -- LilyPond
I hate to say this, but the idea of doing this in the Phillipines (especially the imposition by a non-Phillipine organization) makes the the referenced newspaper article sound like a hoax too.
there is never guarentee of delivery.... thats how sms works...
here in sweden they did some kind of tests where they sent out something like 10 000 sms messages from different places with each of 3 operators that have gsm networks here. the worst operator (comviq) delivered something like 98% of all sms while the other 2 (telia & vodafone) delived almost 100% of all sms messages.
most sms messages where delivered in something like 15seconds but sometimes it could take up to 2-3 minutes.
-- http://electronicintifada.net --
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
living in "developing" nations. I've seen this happen. I've come to the conclusion that it might well be better to starve on your own than take the "help" the IMF offers. Of course this is rarely an option because the IMF is usually called in by the 'developed' nations who already have the nation in trouble by the economic balls. The money raised isn't used so much to bail out the local economy as it is to bail out American and European companies invested in the troubled nation. Economic investments in 'infrastructure' are usually even made in such a way as to make sure all the jobs and money go to these Americans and Europeans, rather to local businesses and workers, thus actually depressing the local economy even further.
I think most people in 'developed' nations might not realize one other fact that relates to this specific issue. In rich countries it's the more economically 'endowed' and early adopters who are the most likely to have cell phones. They're a nice little toy.Teenage girls use them to keep track of each other while shopping at the mall for clothes they can't fit into their already overstuffed closets.
In poor countries it's the *poor* who are most likely to have cell phones. Your house may not have electricity. Hell, you may not even have a *house,* but you can at least scrape up enough money to have a phone so if a job offer comes in you can get it, and steal recharges from whatever source you can manage. Rich people have homes and land lines.
The *banks and businesses* are too poor to pay up enough to stay solvent (or are just plain not paying up). The solution is to squeeze pennies from the poor and unemployed.
Ummmmmmmmmmmmm, right.
KFG
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.
I wouldn't have a problem with it here in the U.S. if it was, as someone said, 1/10th of a cent!
Of course, looking back to reality, it would go to causes
I differ on.
Sigh, when I was younger, you could do a search on "Bush" and come up with, um, things, other than politics.
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..."