MANILA, Philippines—Congress moved closer to getting a bigger slice of the profits of telecommunication firms after a committee of the House of Representatives approved Tuesday a bill seeking to impose a five-centavo excise tax on every text, picture, and video and audio clip sent through mobile phones.

The proposed tax is expected to generate between P20 billion and P36 billion a year for the government. Nearly 70 million prepaid subscribers nationwide send on the average at least 10 text messages a day.

Antique Rep. Exequiel Javier, chair of the ways and means committee, said majority of the House members gave the green light to a proposed tax on text under House Bill No. 6625 without the “no pass-on provision” being insisted on by its author, Ilocos Sur Rep. Eric Singson.

Singson wanted the tax to be borne exclusively by mobile phone providers.

Javier told reporters that Congress could not bar telecommunication firms from passing on the tax to consumers.

A short message service (SMS) costs at least P1 and a multimedia message service (MMS) at least P10.

“It’s very hard to put a no pass-on provision because it is an indirect tax. [A tax is part of the] cost of doing business. You have to pass it on otherwise the business will be losing,” Javier said.

But Speaker Prospero Nograles maintained that the House would ensure that the tax on SMS and MMS would not be passed on to subscribers.

“It is very clear that based on our previous hearings, there is no need to increase the cost of the short messaging system service of our telcos because the P1 per text that is already being charged from consumers is more than enough to cover the five-centavo tax for each text,” Nograles said in a text message to reporters.

Real cost of text message

He said the real cost of each text message was only 25 centavos.

“It is my position that the proposed additional tax on text will be borne by the service providers and that the consumers will not be paying additional costs for texting,” Nograles said.

Other lawmakers will have their chance to give their views on the bill when it goes to the plenary for floor debates, according to Javier.

The bill was approved on the motion of Sorsogon Rep. Jose Solis, with Cagayan de Oro Rep. Rufus Rodriguez, the sole dissenter.

Rodriguez said a tax on text would be an added burden on Filipinos.

Privacy, metering system

Rodriquez also noted possible threats to the privacy of individuals posed by the installation of a metering system that would monitor the number of text messages sent and the amount of text load of each mobile subscriber.

Quezon Rep. Danila Suarez was elated that his proposed metering scheme was incorporated in the bill.

Suarez said this would address a big tax loophole. At present, the government has no way of verifying how many text messages have been successfully sent.

As a result, the big three mobile phone providers were practically dictating the amount of taxes they were paying, Suarez said.

In 2008, based on Philippine Stock Exchange data, Philippine Long Distance Telephone Co. (Smart) netted P34.64 billion; Pilipino Telephone Corp. (Talk N’ Text), with P11.35 billion); and Globe Telecom (P11.28 billion).

In House Bill No. 6625, Suarez succeeded in earmarking the proceeds of the proposed text tax as seed money for acquiring computers and establishing computer labs by the Department of Education, state universities and colleges, and Technical Education and Skills Development Authority.