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?

[SealBeater]

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

SealBeater

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).

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).

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)