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).

What's the problem?

[neksys]

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.

Re:What's the problem?

[Izeickl]

Heh yep, not trolling, but if you had the same amount of tax on fuel etc in the states as there is in the UK you would all soon quickly get rid of your gas guzzlers. UK pays about 75.7 pence per litre, while US pays 25.8 if my source is accurate : http://www.see-search.com/business/fuelandpetrolpr iceseurope.htm

Re:What's the problem?

[SealBeater]

That's cause the U.S. will bomb the hell out of anybody if the gas price goes
up one cent.

SealBeater

Re:What's the problem?

[Hognoxious]

That's cause the U.S. will bomb the hell out of anybody if the gas price goes up one cent.

But taxes are set by your government ... so if taxes go up the US will bomb itself? No wonder you have such a reputation for friendly fire incidents.

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).

what about..

[nick-less]

... charging a tax of 2 cent for every spam mail sent

HUH?

[jonr]

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.

Tax on the stupid?

[dpt]

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".

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 ... and with the baffling popularity of "texting", this trend looks set to continue into a new century.

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).

The IMF is a Scam

[hanwen]

I recently read an article on the IMF.

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)

• salon
• The Observer
• The new republic online.

Or name a country where IMF intervention did work: (it failed in Indonesia, Thailand, Russia, Brazil and Argentina)

No, it's a hoax

[shoppa]

The "US E-mail tax" is a hoax that's been around for years. See this link for details on the hoax, and in particular these rebuttals:

• Congress to Block Imaginary Internet Tax Bill from the Washington Post
• E-mail Rumor Completely Untrue from the United States Postal Service
• E-mail Tax Hoax from the US Department of Energy's Computer Incident Advisory Capability
• No Consumer Per-Minute Charges to Access ISPs from the Federal Communications Commission

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.

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.

I wouldn't have a problem

[bahwi]

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.