Joey De Venecia III (ZTE-NBN whistle blower) rejects proposed tax on SMS

The revival of the plan to impose a tax on SMS (short messaging service) or texting is not the best way to raise additional revenues for the government.

“Ultimately, you will be punishing the Filipino taxpayer since the telecommunications companies will pass on the cost to consumers,” businessman Joey De Venecia III (ZTE-NBN whistle blower) said in a statement yesterday.

The “tax on text” plan was revived in the House of Representatives last week in answer to the budget deficit which is expected to widen this year.

Trade and Industry Secretary Peter Favila is reportedly in favor of the plan, which was earlier shelved after a public outcry showed that the tax would lack support from consumers.

But Socio-economic Planning Secretary Ralph Recto had earlier rejected the proposal, arguing that the big telcos – Globe, Smart and Sun – were already paying substantial income taxes.

Moreover, the government already collects a 12 percent expanded value added tax (eVAT) from local text messages and an overseas communications tax for international text messages.

“Classifying SMS as a sin product does not make sense,” added de Venecia III, “since texting is a form of communication essential for business. Families and friends are also able to keep in touch at a low cost,” he added.

“Overtaxing an essential communications tool would harm both the industry and the consumer,” according to de Venecia III.

“The government should instead focus on increasing its tax collection efficiency instead of adding new taxes,” he said.

Considered as one of the pioneers of the call center industry and father of broadband technology in the country, de Venecia III has been putting up IT-based companies for the past 15 years.

As proponent of the proposed national broadband network, he became known for being the whistleblower in the ZTE-NBN scandal, which would have burdened Filipino taxpayers with an onerous contract worth billions of pesos. The administration was forced to scrap the deal following de Venecia III’s revelations.

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